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Why would a company need to create a master budget?

A master budget is a detailed and comprehensive analysis of an organizations long and short term goals. Identify the major inputs to the master budget and the usefulness of each.

Additionally why would a company need to create a master budget? What are the advantages and disadvantages?

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1. Identify the major inputs to the master budget and the usefulness of each.
Budget is a comprehensive financial plan of allocation of financial resources. Budgeting helps in booth planning and controlling the activities of the organization. It is a useful communication tool. Master budget means set of operating budgets related to finance, operations, production, sales, etc., and including projected (pro forma) cash flow statement, income statement, and balance sheet. (Businessdictionary, 2009) As per accounting-financial.com, Master budget is "A comprehensive master budget is a formal statement of management's expectation regarding sales, expenses, volume, and other financial transactions for the coming period. It consists ...

Solution Summary

This response outlines the inputs of a master budget and the usefulness of each. The reason why a master budget would be needed is outlined as well.

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