Master Budget Simulator
Develop an annual business plan and forecast financial performance.
Input Assumptions
Sales & Inventory Policy
Production Costs
S&A Expenses
Operating Budgets Results
Pro Forma Income Statement
Flexible Budget Simulation
See how the budget changes based on actual activity levels.
Master Budget Basis
Actual Performance
| Item | Master Budget (5,000 units) | Flexible Budget (4,000 units) | Actual Results (4,000 units) |
|---|
Key Budgeting Concepts
Master Budget
A comprehensive plan that documents specific short-term operating performance goals. Typically prepared for one year, it consists of operating and financial budgets.
- Operating Budgets: Budgets for the main operating activities of a company, such as sales, production, and costs. (e.g., Sales Budget, Production Budget, DM Budget).
- Financial Budgets: Plans for the sources and uses of funds based on the operating budgets. (e.g., Cash Budget, Pro Forma Balance Sheet, Pro Forma Income Statement).
Budgeting Flow
Budgets are prepared sequentially, with each component budget linking to the next. The sales budget is the starting point for the entire process.
Sales Budget → Production Budget → DM/DL/OH Budgets → COGS Budget → S&A Expense Budget → Pro Forma Income Statement & Cash Budget → Pro Forma Balance Sheet
Flexible Budget
A budget prepared for a range of activity levels rather than a single level. It is useful for performance evaluation by comparing it to actual results at the same activity level.