Answer
Steps in preparing an operating budget:
Identify the Problem and Uncertainties: Understand goals and challenges.
Obtain Information: Collect data on performance and market conditions.
Make Predictions About the Future: Predict sales, pricing, costs, and efficiency.
Make Decisions by Choosing Among Alternatives: Based on predictions, select a strategy or course of action to achieve the budgeted goals. Evaluate the risks and benefits of different alternatives and choose the most appropriate one.
Implement the Decision, Evaluate Performance, and Learn: Put the plan into action, monitor performance, and learn from discrepancies.
Work Step by Step
Steps in preparing an operating budget:
Identify the Problem and Uncertainties: Understand goals and challenges.
Obtain Information: Collect data on performance and market conditions.
Make Predictions About the Future: Predict sales, pricing, costs, and efficiency.
Make Decisions by Choosing Among Alternatives: Based on predictions, select a strategy or course of action to achieve the budgeted goals. Evaluate the risks and benefits of different alternatives and choose the most appropriate one.
Implement the Decision, Evaluate Performance, and Learn: Put the plan into action, monitor performance, and learn from discrepancies.
