Web-Based Training Series: Building an Operating Budget

Building an Operating Budget        





Learners will be able to identify the components of an operating budget and how it works. They will recognize the value of mini-budgets in the construction of an operating budget. In effect, learners will recognize the value of bottom-up budgeting and will be able to apply the principles of break-even analysis to the construction of operating budgets.


Every manager with budgeting or capital investment evaluation responsibilities


3.5

Understanding the Operating Budget

  • recognize the value of understanding the basics of an operating budget.
  • classify costs as direct or fixed costs.
  • derive the values for the components of an operating budget.
  • select the most appropriate method of market analysis to obtain relevant information for a given business situation.
  • determine the revenue in a given business scenario.

    • Mini-budgets

  • recognize the value of mini-budgets in developing a successful operating budget.
  • interpret the data in a given production budget.
  • determine the total cost of material to be purchased using the materials budget and the inventory schedule.
  • interpret the data in a given labor budget.
  • complete the given fixed direct expenses budget by computing the values of the missing elements.

    • The Budget Decision

  • recognize the importance of "bottom-up" budgeting.
  • complete the given administrative budget by computing the values of the missing elements.
  • determine the break-even revenue in a given business scenario.
  • determine the profit revenue level by using the bottom-up approach.


    • FIN0262

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