What Are The Different Types Of Budgets And Their Functions In An Organization.

We can basically classify budgets into two categories namely:

• Capital Budgets
• Operating Budgets

Below explain their functions:

Capital Budget:

• is concerned with the provision of resources for the long-term running of a business for example, the Capital Expenditure Budget

Operating Budget:

• Is concerned with the DAY-TO-DAY operating activities of the business.
• Usually prepared for a normal operating cycle of one year.
• Common operating budgets includes the following:
• Sales Budget
• Production Budget
• Machine Utilization Budget
• Material Budget
• Labor Budget

• Overhead Budget- the Production Overhead Budget, Administration Budget, Selling Overhead Budget and Distribution Overhead Budget
• Research and Development (R&D) Budget
• Working Capital Budgets which includes the Stock Budge, Debtors Budget and Creditor Budget
• Cash Budget