The operational budgets within the master budget includes summary figures of the company's operations.
Sales Budget: The summary sales budget includes the number of units sold per product, average cost per unit, and the total sales for the period.
Production Budget: The production budget lists opening stock, total number of sales for the period, and the required opening stock for the next accounting year, to derive the number of units produced.
Cost of Goods Sold: The cost of goods sold budget lists the per unit cost of direct materials, direct labor, and manufacturing overheads, to determine the total costs incurred to produce the number of units sold, distinct from the total cost of units actually produced.
Operational Expense Budget: The operational expense budget summarizes the cost of direct materials, direct labor, and manufacturing overheads involved in producing the net number of units, derived from the production budget.
Selling Expense Budget: The selling expense budget lists the net value of items such as commission, rent, advertising, transportation, and other expenditures incurred to make sales. Such expenses are either fixed, remaining the same regardless of the number of units sold, or variable, changing with the number of units sold.
Administrative Expense Budget: The administrative expense budget lists out the indirect costs associated with selling the product, such as salaries of staff, insurance, communication charges, cost of office supplies, bad debts, and other items.