Question

A comprehensive or overall formal plan for a business that includes specific plans for expected sales, the units of product to be produced, the merchandise (or materials) to be purchased, the manufacturing, selling, administrative, and general expense to be incurred, the long-term assets to be purchased, and the amounts of cash to be borrowed or loans to be repaid, as well as a budgeted income statement and balance sheet, is called a(n):

A. Master budget.
B. Kaizen budget.
C. Capital expenditures budget.
D. Continuous budget.
E. Operating budget.

Answer 1

The plan outlined in the question is known as a Master Budget, which is an inclusive financial plan covering all major aspects of a business's operations including sales, production, expenses, and financial statements.

Step-by-step explanation:

The comprehensive formal plan described by the student in question is called a Master Budget. This planning document includes a wide array of financial details, including expected sales, production units, merchandise purchases, various expenses, asset acquisitions, and financing details, and includes projected financial statements such as a budgeted income statement and balance sheet. Essentially, a Master Budget serves as a detailed and integrated road map for the company's finances, covering virtually every financial aspect of the business over a specific period.