The sales budget of an organization indicates the anticipated sales in units of each product/service and the anticipated selling price of these products/services. The sales budget is dependent upon the enterprise’s projected sales, its manufacturing capability, and its short- and long-term goals. The First Budget in the Budgeting Process In an enterprise, the sales budget is always the first budget … Read More
CMA Exam Study Notes: The Production Budget
The Production Budget of an enterprise is based on its sales budget. Typically, the production budget is in line with the capacity and inventory needs of the enterprise. Production Plans and Inventory Levels When an enterprise receives a huge order unexpectedly, it will need to boost its inventory level to deliver the finished goods in time. Here, when the enterprise … Read More
CMA Exam Study Notes: Annual/Master Budget
The Annual Budget, commonly known as the Master Budget, comprises various budgets of an enterprise. Developing an annual budget for a large business takes several months to complete. The Development of the Annual Budget The annual budget of an enterprise can be fully developed only when all its other budgets have been entirely finished. For instance, the purchase budget cannot … Read More
CMA Exam Study Notes: The Cash Budget
The most important budget of an enterprise is known as the Cash Management Budget or the Working Capital Budget, and it’s an important topic to study for the Certified Management Accounting exam. This budget extracts information from all the other budgets. For this reason, the Cash Budget is developed after all the other budgets are completed. The cash budget meticulously … Read More
CMA Exam Study Notes: Planning & Budgeting Concepts
CMA Exam: The Planning & Budgeting Process There are various types of budgets such as flexible, zero-based, and static. Something “not being in the budget” is a common reason all of us have heard being mentioned at one time or another. A budget is prepared well ahead of the period that it comprises, and it is basically based on historical … Read More
