An operating budget is a combination of known expenses, expected future costs, and forecasted income over the course of a year. Operating budgets are completed in advance of the accounting period, which is why they require estimated expenses and revenues. This lecture introduces you to operating budgets. This chapter presents the following content: Purchases budget, cost of goods sold budget, cost of goods sold budget, specialised service industry budgets , budgeted statement of financial performance. | Chapter 3 Operating budgets Operating budgets Purchases budget Cost of goods sold budget Operating expense budgets 1. Marketing expense budget 2. Administration expense budget 3. Financial expense budget Specialised service industry budgets 1. Professional and support labour budget 2. Materials usage budget Budgeted statement of financial performance Purchases budget in dollars for 3 months ending 30 June April $ May $ June $ Quarter $ Cost of sales add ending stock Total requirements less beginning stock purchases Purchases budget in units for quarter ending 31 March Jan Feb March Quarter Sales [units] Ending stock [units] Total req. [units] less beginning stock [units] Purchases [units] Cost per unit $ Cost of purchases $ Cost of goods sold budget for 3 months ending 30 June April $ May $ June $ Quarter $ Beginning stock Purchases Goods available for sale Ending stock Cost of sales Marketing expense budget for 3 months ending 30 June April $ May $ | Chapter 3 Operating budgets Operating budgets Purchases budget Cost of goods sold budget Operating expense budgets 1. Marketing expense budget 2. Administration expense budget 3. Financial expense budget Specialised service industry budgets 1. Professional and support labour budget 2. Materials usage budget Budgeted statement of financial performance Purchases budget in dollars for 3 months ending 30 June April $ May $ June $ Quarter $ Cost of sales add ending stock Total requirements less beginning stock purchases Purchases budget in units for quarter ending 31 March Jan Feb March Quarter Sales [units] Ending stock [units] Total req. [units] less beginning stock [units] Purchases [units] Cost per unit $ Cost of purchases $ Cost of goods sold budget for 3 months ending 30 June April $ May $ June $ Quarter $ Beginning stock Purchases Goods available for sale Ending stock Cost of sales Marketing expense budget for 3 months ending 30 June April $ May $ June $ Quarter $ Administration expense budget for 3 months ending 30 June April $ May $ June $ Quarter $ Financial expense budget for 3 months ending 30 June April $ May $ June $ Quarter $ Budgeted statement of financial performance for 3 months ending 30 June April $ May $ June $ Quarter $ Sales less COGS Gross Profit Operating exp. Marketing Administration Financial Total Expenses Net Profit
