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Distinguish between a master budget and a sales forecast. | Acemyhomework Writers
Distinguish between a master budget and a sales forecast. | Acemyhomework Writers
Master Budget vs. Sales Forecast: Successful companies construct master budgets and sales forecasts to identify expected expenses and sales over a

Distinguish between a master budget and a sales forecast. | Acemyhomework Writers

Successful companies construct master budgets and sales forecasts to identify expected expenses and sales over a specified period of time. Budgets and forecasts are helpful to guide the company throughout the year and identify variances expediently during the period. The company can then make adjustments to its policies proactively if necessary.

The main difference between a master budget and a sales forecast is that a master budget estimates sales and expenses for all departments, while a sales forecast is used only to estimate sales for a given period.

A master budget is essentially a roadmap of planned revenues and expenditures over a given period of time, typically a year. It encompasses all of a company’s departments and allocates expected expenses to each of them. It also specifies how much revenue is expected from its products or services. The master budget will include budgeted financial statements and a cash forecast.

A sales forecast estimates sales of goods or services over a specified period of time. It predicts how many sales can be expected based upon prior year history and orders from customers. The sales forecast does not, however, calculate expected costs of revenue or other operating expenses. It is used only to predict sales dollars and units of sales.

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Distinguish between a master budget and a sales forecast. | Acemyhomework Writers

Distinguish between a master budget and a sales forecast. | Acemyhomework Writers