What is a Master Budget?
The master budget is the aggregation of all lower-level budgets produced by a company's various functional areas, and also includes budgeted financial statements, a cash forecast, and a financing plan. The master budget is typically presented in either a monthly or quarterly format, and usually covers a company's entire fiscal year. An explanatory text may be included with the master budget, which explains the company's strategic direction, how the master budget will assist in accomplishing specific goals, and the management actions needed to achieve the budget. There may also be a discussion of the headcount changes that are required to achieve the budget.
A master budget is the central planning tool that a management team uses to direct the activities of a corporation, as well as to judge the performance of its various responsibility centers. It is customary for the senior management team to review a number of iterations of the master budget and incorporate modifications until it arrives at a budget that allocates funds to achieve the desired results. Hopefully, a company uses participative budgeting to arrive at this final budget, but it may also be imposed on the organization by senior management, with little input from other employees.
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This course covers all the major managerial accounting concepts that are a part of every Managerial ( Management) Accounting course in every Master of Business Administration university program.
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I am a Professor of Management Accounting and Control Management with over thirty-five years of experience teaching accounting to college students, undergraduate and MBA university students as well as CMA candidates seeking to earn their Professional Certified Management Accountant Designation.
I earned the Certified Management Accountant Designation 40 years ago. With that I then earned my Master of Business Administration degree and later a Ph.D. in accounting. I also have earned the Certified Quality Auditor certification.
My passion is online teaching. I have over 400 instructional videos on my Youtube channel “Your Accounting Prof” and I have created over 30 management and accounting courses on various online platforms.
Dr. John
