It is not difficult to devise a master or overall budget. It is simply your realistic, long-term aspirations translated into total costs. So often, families consider only the cost for the item, when the item in question comes with accompanying repair or installation costs. For example, an air conditioner may require electrical, plumbing and installation expense. (www.debtfreebenefits.com)

Those "other" costs should be considered in establishing the financial impact on the family budget. Sometimes the incidental costs may be as great at the time as the major purchase itself. Good planning or budgeting usually avoids these mistakes. (www.debtfreebenefits.com)

After the long term objectives are established, each objectives must be put into annual terms. There are many questions to answer: When can you buy it, how much will it cost, do you pay it all now or can you spread the total costs over more than one

Instructors who wish to introduce students to the electronic spreadsheet in a way that enhances the learning of course content will find an excellent opportunity to do so when covering the development of the master budget. The interrelationship between the master budget's component schedules and sub-budgets is complicated, and the process of manually tracing through them to determine the pro forma income statement and balance sheet effects of a change in some variable is tedious, time consuming work. As a result, instructors often concentrate on the preparation of the budget and do not stress its actual application in planning and controlling business operations. (Pence)

To develop the exercise, the instructor creates his/her own template by setting up the master budget developed in his/her text (or one of his/her own making) as a spreadsheet file. The file may then be saved and made available to students along with a set of instructions. The instructions should describe a realistic situation in which the company faces several financial constraints (e.g. a loan agreement might stipulate a minimum current ratio value, there might be a limit on bank borrowing, a target return on equity ratio could be given, etc.) and should present a set of possible future events that are to be analyzed (e.g. labor or materials prices may be expected to rise, the company may be worried about a downturn in sales, a large capital expenditure may be anticipated, etc.). (Pence)

A master budget is simply the compilation of these major considerations put on the same page (s) so

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