Question

Linda owns a cattle ranch in Montana. In July, she plans to purchase 50 heads of stockers to rebuild her herd. What type of budget is this?

a) Capital budget
b) Personal budget
c) Cash flow budget
d) Operating budget

Answer 1

Linda's budget for purchasing cattle to rebuild her herd is classified as an operating budget, which relates to the day-to-day running costs of a business.

Step-by-step explanation:

The type of budget Linda is planning for her cattle ranch involves acquiring new assets (cattle) for her business operations with the intention to rebuild her herd. The appropriate category for this type of budget is an operating budget. An operating budget is concerned with the ongoing, day-to-day expenses of running a business, such as buying stockers in the case of a ranch.