Question

What are the primary components of an enterprise budget?

Answer 1

Enterprise budget refers to identification of all expenses and income which are considered to be an important factor affecting the business for a specific period.
Whatever budge you prepare, whether sales budget, production budget, cash budget or etc. it includes some fundamental components. They are explained as below,
1.       Revenue: It includes receipt which is considered as income. Generally it is short term in nature.
2.       Variable cost: It is an expense which increases with every increase in the no. of units produced or sold.
3.       Fixed Cost: It is an expense which remains fixed irrespective of units produced and it remain constant even if the production activity has not taken place. Example Rent charges, depreciation, etc.