The operating budget contains the
revenue
In accounting, revenue is the total amount of income generated by the sale of goods and services related to the primary operations of the business.
Commercial revenue may also be referred to as sales or as turnover. Some companies receive reven ...
and expenditure generated from the daily business functions of the company; see .
[Edriaan Koening (N.D.]
What is Corporate Budgeting?
chron.com
The ''Houston Chronicle'' is the largest daily newspaper in Houston, Texas, United States. , it is the third-largest newspaper by Sunday circulation in the United States, behind only ''The New York Times'' and the ''Los Angeles Times''. With i ...
It concentrates on the
operating expenditures, i.e.:
cost of goods sold
Cost of goods sold (COGS) 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 identification, first-in first-out (FIFO), or average cost ...
(COGS), the cost of direct labor 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, however, contain
capital expenditure
Capital expenditure or capital expense (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 a capital expenditure ...
s and
long-term loans; for these see
capital budgeting
Capital budgeting in corporate finance is the planning process used to determine whether an organization's long term capital investments such as new machinery, replacement of machinery, new plants, new products, and research development project ...
.
References
Budgets
{{econ-stub