Operating Budget: The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget. Cash Budget : The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period. To explain: Whether the cash budget should be prepared before the operating income budget.

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Answer 1

Question

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

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“Cash budgets must be prepared before the operating income budget.” Do you agree? Explain.

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Answer 2

Question

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

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Answer 3

Question

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

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Answer 4

Question

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

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Answer 5

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

Answer 6

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

Answer 7

Chapter 6, Problem 6.15Q

To determine

Operating Budget:

The operating budget is that budget which is prepared to plan all the operating activities of an organization for a particular period. This budget combines all the sales, production, raw materials, direct labor, manufacturing overhead and selling and administrative expenses budget.

Cash Budget:

The cash budget is a part of the financial statements which is a plan for the cash receipts and expenses for a particular accounting period. This budget gives an estimation of all the cash inflows and outflows of a business for the given financial period.

To explain: Whether the cash budget should be prepared before the operating income budget.

Answer 8

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Answer 9

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Answer 10

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Answer 11

Ch. 6 - What are the four elements of the budgeting cycle?Ch. 6 - Define master budget.Ch. 6 - Strategy, plans, and budgets are unrelated to ore...Ch. 6 - Budgeted performance is a better criterion than...Ch. 6 - Production managers and marketing managers are...Ch. 6 - Budgets meet the cost-benefit test. They force...Ch. 6 - Define rolling budget. Give an example.Ch. 6 - Outline the steps in preparing an operating...Ch. 6 - The sales forecast is the cornerstone for...Ch. 6 - Prob. 6.10Q

Solution Summary: The author explains that the cash budget should be prepared after the operating income budget.

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