Choice "C" is correct. Operating budgets describe the plan for revenue and expenses and the supporting schedules that go with them. Examples include sales, materials, labor, overhead, production, purchases and the forecasting of cash that will be necessary to pay for them. Capital budgets plan for the purchase of capital assets, which will only affect the operating budget through their subsequent effect on expense via depreciation. Choices "b", "a", and "d" are incorrect, based on the above explanation.
