Functional budgets are formed to produce a master budget.

Name: Functional budgets are formed to produce a master budget.
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Functional budgets, such as sales budget, production budget, and materials budget, are prepared to estimate the future financial needs of each department. These budgets are then consolidated to create a master budget, which outlines the organization's overall financial plan for the upcoming period.

Functional Budgets Are Formed to Produce a Master Budget