Question

Explain how to forcast a general & administrative expenses using the driver based model.

Please include a diagram

Answer 1

Operating budgets specify the expected outcome of any sellings, capital spending, manufacturing, purchasing labla management and administrative activities during the planning period. Operations personnel use these plans to guide and coordinate activities during the planning period.

It includes sales plan, capital spending plan, production plan, material pupurcha plan, labot hiring and training plan and administrative and discretion spending plan.

Financial budgets are used to evaluate the financial consequences of a proposed decision.