LO 7.2Which of the following is not an operating budget?

sales budget

production budget

direct labor budget

cash budget

correct option is D. cash budget

Explanation:

solution

Operating budget is a forecast of expenses or revenues which is expect for one or more than one future period

so here Sales budget and production budget and the direct labor budget are the part of operating budget

but cash is asset item and not an expenditure so cash budget is not a part of operating budget

so correct option is D. cash budget

cash budget

Explanation:

An operating budget refers to the forecast of one or more future months of income and expenditure anticipated. The executive team usually formulates an operating budget even before the start of the year and demonstrates anticipated activity levels throughout the year. A variety of branch plans which contain data on a more granular level will sustain this budget.

For Instance, independent supporting budgets might be available that cover payroll, the price of produced goods, and stocks. In order to identify the magnitude of any deviation from plans, actual figures are then linked to a operating budget. Throughout the year, administration will adjust its decisions to match real results with the operating budget.