alleryStart learning →What is a master budget?
AA budget covering only factory costs
BA budget for the largest product line
CA budget prepared by senior managers
DAll separate budgets combined in one report
Answer & Solution
Correct answer: D. All separate budgets combined in one report
1. A master budget collects all the separate budgets for different elements of a business into one report.
2. Its operating budgets carry goals for sales and the associated costs of production.
3. Those operating budgets result in the budgeted income statement.
4. Its financial budgets, the cash and capital expenditures budgets, feed the budgeted balance sheet.
_Source: Jonick, Principles of Managerial Accounting (UNG Press, CC BY-SA 4.0), section 7.4 Master Budget_
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