Question

Why is the sales budget so important to the budgeting process?

Short answer

Sale is a term used when the finished goods of the firm are sold in the market to earn an income. It is entered as a sale from goods in the firm's books of accounts.

Step-by-step solution

Introduction

The master budget, also known as the sales budget, is the first budgeting schedule prepared in an organization that helps an organization estimate its future sales revenue.

Reason

The sales budget is considered the most important variant in the budgeting process. When an organization prepares its sales budget, an estimated value of the expected sales is determined based on the purchase budget of the organization's merchandise, selling and administrative expense budget, and production budget is prepared.