Budget Assumptions
Budget Assumptions
A master budget is based on various estimates and assumptions. For example, the sales budget requires three estimates/assumptions:
- What are the budgeted unit sales?
- What is the budgeted selling price per unit?
- What percentage of accounts receivable will be collected in the current and subsequent periods?
When Microsoft Excel© is used to create a master budget, these types of assumptions can be depicted in a Budget Assumptions tab, thereby enabling an Excel-based budget to answer “what-if” questions.
Over to you
Have you seen the “budget assumptions” tab in Microsoft Excel? If you haven’t, take this opportunity to look into it.
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