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The operating expenses budget is based on data from the sales budget. We need to know how many units were going to sell before we what operating expenses well have. You can see that the operating expense budget is the seventh budget completed in the master budget process A common format is to divide operating expenses into two classifications: variable operating expenses and fixed operating expenses. Recall that variable costs are shown as per unit costs where fixed costs are shown in total dollars. So here we have an example of an operating budget. Although it looks like a lot of items, most of businesses will actually have many more items. Lets look at the variable and fix separately say you can see the details a little better. The variable operating expenses are usually listed as a per unit charge. In this case, we will list the sales units from the sales budget Then I assume that sales commissions incurred are $1.00 per unit, and shipping expenses incurred are $2 dollars per
