 In this discussion we will discuss the discussion question of describe the sales budget and how it is prepared. If we see a discussion question like this or an essay question like this we might want to fit in and start out with what the budget is. Remember when we think about the essay questions or discussion questions we're often trying to expand we're trying to put more information in there. First a word from our sponsor. Yeah actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us but but that's okay whatever because our merchandise is is better than their stupid stuff anyways like this CPA thinking cap for example CPA thinking CAP you see what we did with like with the letters and this CPA thinking cap is not just for CPAs either anyone can and should have at least one possibly multiple CPA thinking caps why because based on our scientific survey of five people all of whom directly profit from the sale of these CPA thinking caps wearing this CPA thinking cap without a doubt according to the survey increases accounting productivity 10 fold yeah at least yeah apparently the hat actually channels like accounting energy from the quantum field ether directly into your head allowing you to navigate spreadsheets faster it's kind of like how in like the matrix when Neo learns kung fu or at least that's what the scientific survey saying so get one because the scientific survey participants could really use some extra cash if you would like a commercial free experience consider subscribing to our website at accounting instruction dot com or accounting instruction dot think of it dot com because we're more likely to pick up points if it's a discussion type forum just participating typically we'll pick up points if we're talking about an essay question then even if we kind of talk around the topic if we even if we don't know exactly what it is we may still be touching on some items that are necessary and then pick up some points in that way so we could start off that the sales budget is going to be part of the master budget type process it's going to be a formal process that we go in for the master budget and we can go into the objectives of the master budget to plan for the future to organize people to get people on on the same page hopefully to provide incentives for people then we can go into basically the ordering of the master budget when we consider a master budget we are typically considering in terms of a manufacturing company in this case because that's going to be like the most complex case and therefore we can go into it and say hey there's got to be an order in which the budgeting process must happen the end result will typically be those financial statements the budgeted balance sheet the budgeted income statement the starting point will typically be here the sales budget the sales budgets usually that's one thing that we would want to point out in an essay question or discussion question hey the sales budget that's where we begin typically because many of the other components of the rest of the budget will be dependent on the sales budget and you can think of the budgeting process as kind of a timing account it's more of an income statement related type of process typically because the income statement deals with timing and the top item on the income statement is of course sales so sales you can think you know that's kind of like the starting point as it would be the starting point of our budget the sales budget will include the sales typically in units and then we'll have the units times you know the unit price and that will give us the budgeted dollar amount of sales both will be important we're going to have to consider this in depth we're going to have to do analysis on this because we want to project into the future how many units we're going to sell and how many how much we're going to charge for those units and of course we might have to consider things like advertisement and whatnot to determine how many units we're going to sell we need the units in order to calculate things like a production budget that will be producing soon and a raw materials budget these things are going to be dependent on the units that we will be producing and of course the sales dollars is going to be kind of the starting point the top line in terms of revenue as we go through the rest of the budgeting process as well