The operating budget contains the revenue and expenditure generated from the daily business functions of the company. It concentrates on the operating expenditures — the cost of goods sold, the cost of direct labour and direct materials that are tied to production; as well as the overhead and administration costs tied directly to manufacturing the goods and providing services.
The operating budget will not contain capital expenditures and long-term loans.
See also
References
- Jonas Elmerraji (2021). How Budgeting Works for Companies, investopedia.com
- Edriaan Koening (N.D.) What is Corporate Budgeting?, chron.com
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