Guillermo is currently in the process of projecting how much his firm will have to spend on supplies, travel, rent, advertising, and salaries for the coming financial year. Guillermo is working on the:

a. capital budget.

b. advertising budget.

c. operating (master) budget.

d. cash budget.

The answer is c. operating (master) budget.

Explanation:

Let re-visit to the definition of operating budget to justify why c. operating budget is the answer.

Operating budget is the budget for revenues and expenses for the future period, that is, it forecast how many level of activities and how much they will cost for income generating purpose in the forecast period.

As described in the question, the forecasting items falls among the expenses budgeting. Thus, c. operating (master) budget is the correct answer.