The operating budget contains the
revenue
In accounting, revenue is the total amount of income generated by the sale of product (business), goods and services related to the primary operations of a business.
Commercial revenue may also be referred to as sales or as turnover. Some compan ...
and expenditure generated from the daily business functions of the company.
[Edriaan Koening (N.D.]
What is Corporate Budgeting?
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It concentrates on the
operating expenditures — the
cost of goods sold
Cost of goods sold (COGS) (also cost of products sold (COPS), or cost of sales) is the carrying value of goods sold during a particular period.
Costs are associated with particular goods using one of the several formulas, including specific iden ...
, 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 expenditure
Capital expenditure or capital expense (abbreviated capex, CAPEX, or CapEx) is the money an organization or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land. It is considered ...
s and
long-term loans.
See also
*
Capital budgeting
Capital budgeting in corporate finance, corporate planning and accounting is an area of capital management that concerns the planning process used to determine whether an organization's long term capital investments such as new machinery, repla ...
References
Budgets
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