Managerial Accounting, v1.0: "Chapter 9, Section 3: The Master Budget"

The master budget for Jerry’s Ice Cream has numerous schedules, including budget schedules for sales, production, direct materials, direct labor, manufacturing overhead, selling and administrative, the income statement, capital expenditures, cash, and the balance sheet. The sales budget is most important because sales projections drive the other budgets.

To get the most out of this unit, you should attempt to recreate your own master budget for Jerry’s Ice Cream using Microsoft Excel. Furthermore, watch the series of videos below for more practice with master budgets.

Note this is an extensive section of Chapter 9 with five subsections that are unnumbered in the text. They are:

  • Sales and Production Budgets
  • Direct Materials Purchases Budget
  • Selling and Administrative Budget
  • Capital Expenditures Budget /Cash Budget  and 
  • Budgeted Balance Sheet.

If you are going to use Excel, each schedule should be a separate sheet. Be sure to include all sums and linkages as you prepare your own master budget.