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What is the master budget? What are the two main components of the master budget? What is a pro forma financial statement in budgeting? What is the ending inventory budget? What are the three financial statements produced by the master budget? Why is the master budget prepared before the period begins? What is a pro forma cash flow statement in the master budget? What is the first budget prepared in the master budget and why? What is a budgeted income statement used for? In what order are the components of the master budget prepared?
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What is the selling and administrative expense budget?

Beginner

Answer

This budget plans non-production operating expenses—sales commissions, marketing, salaries, rent, admin costs—split into variable (e.g., commission with sales) and fixed elements. It feeds the budgeted income statement below gross profit and the cash budget for payments.
Real-world example The S&A budget projects marketing, admin salaries, and commissions for the budgeted P&L.

Common follow-ups: Which costs are variable here? | What does it feed?

Types of Budgets Flexible Budgets The Master Budget
All 34 The Master Budget questions