Operating budgets
from class: Managerial Accounting Definition Operating budgets are detailed projections of all anticipated income and expenses over a specific period, typically a fiscal year. They serve as a financial plan to guide the day-to-day operations of an organization.
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Predict what's on your test 5 Must Know Facts For Your Next Test Operating budgets typically include revenue forecasts, expense estimates, and profit projections. They are essential for managing cash flow and ensuring an organization stays financially healthy. Operating budgets are often divided into smaller sub-budgets such as sales, production, and administrative budgets. Variance analysis is frequently used to compare actual results against the operating budget to identify deviations. The preparation of an operating budget usually involves input from various departments within the organization. Review Questions What components are typically included in an operating budget? Why is variance analysis important in the context of operating budgets? How do different departments contribute to the preparation of an operating budget? "Operating budgets" also found in:
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