Tampa Global Business 2 Complete Practice Test 2025

A company's operating budget primarily projects revenue from sales and costs. This budget is a critical financial tool that outlines expected income from the sale of goods or services and estimates the associated costs necessary to generate that income over a specific period, typically a fiscal year.

The operating budget allows management to plan for expected revenues, control costs, and create a financial roadmap for achieving the company's profitability goals. It assists in determining whether the company can cover operational expenses, hence it focuses heavily on the relationship between anticipated income (revenue) and expenditures (costs) related to day-to-day operations.

While aspects like employee salaries and market trends may influence budgeting decisions, they are not the primary focus of an operating budget. Employee salaries and wages fall under costs considered in the budget, while future market trends typically require separate analysis and forecasting processes. Thus, the essence of an operating budget is a balance between projected revenues from sales and the costs incurred to achieve these sales.