Budgets help businesses track and manage their resources. They are used by businesses to measure their spending. They are also utilized to develop effective strategies for maximization of assets and revenues.
There are many types of budgets, commonly used are:
Master Budget
Operating Budget
Cash Flow Budget
Financial Budget
Financial Budget
Among the five mentioned, the type of budget based on multiple levels of projected sales or production is the operating or operation budget. To create an accurate picture of this, operating budgets must account for factors such as sales, production, labor and materials costs, overhead, manufacturing and administrative expenses.