Development of the operating budget begins with the
A)cash budget.
B)sales budget.
C)overhead budget.
D)pro-forma budget.

Question

Quizplus · Accepted Answer

The development of the operating budget usually begins with the sales budget since it is the backbone of the entire budgeting process. The sales budget provides the basis for projecting the expected level of sales revenue, which then drives the budget for production, cost of goods sold, and other related expenses. Therefore, the sales budget is usually the first budget prepared in the budgeting process.

Development of the Operating Budget Begins with the