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An operating functional budget is expressed in both units and amount.
Revenue budget and functional budget. Functional budget is the budget which relates to a specific function of the business e g sales budget production budget. It forms the basis on which all the other budgets are built up. Sales budget is the most important budget and of primary importance. The usual functional budgets are.
On the contrary when an operating budget relates to cost the stated amount reflects cost and the input. When operating budgets relates to revenues the units presented are expected to be sold and the stated amount reflect selling prices. The revenue budget. Similarly when the government is performing its day today functions lot of revenue will be accrued to it.
Functional budget is related to a major function of the business. The sales in terms of quantity value which are analyzed by the product by region by month by salesman by distribution channels are shown by this budget. A operating and functional budgets. Master budgets functional budgets provide financial information needed to create a master or summary budget of the overall expenditures of a department or company.
Expenditure is needed to finance government functions like defense social services administration etc and these are the main revenue expenditures. These expenditures and receipts are related to the day to day functioning of the government. Revenue budget involves revenue receipts and revenue expenditure. The number of functional budget depends upon the size and nature of the business.
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