There is a column for the amounts that were budgeted

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Unformatted text preview: wo) Download free ebooks at 40 Understanding Budgets Managing Budgets XYZ Co. FY11 Operating Budget November, 2010 FY10 Actual FY11 Budget FY11 Projected Actual FY11 YTD Income: Sales $256,456 $278,000 $269,000 $109,000 Fees $17,890 $21,000 $23,500 $10,090 Interest $3,200 $4,800 $4,020 $1,876 Other $225 $300 $280 $107 $277,771 $304,100 $296,800 $121,073 $160,000 $178,000 $168,000 $162,000 $437,771 $482,100 $464,800 $283,073 Salaries $137,000 $156,000 $148,000 $65,000 Benefits $13,700 $15,600 $14,800 $6,500 Office Rent $12,000 $12,600 $12,600 $5,250 Utilties $4,875 $5,200 $5,200 $2,167 Insurance $1200 $1,440 $1,440 $1,440 Marketing $8,000 $10,000 $12,000 $7,500 Total Operating Expenses: $176,775 $200,840 $194,040 $87,857 Total Income: Reserves Total Operating Income: Operating Expenses: Figure 8: Sample Budget Download free ebooks at 41 Understanding Budgets Managing Budgets Note that in Figure 8, the Chart of Accounts numbers were left out for convenience, but normally they would be listed in numerical order down the first left-hand column. In some budgets, there might also be a final column called “budget deviation.” This is the percent difference between where you planned to be versus where you are. However, before we calculate deviation, let’s take a look at what information the budget in Figure 8 gives us, as well as what questions it might lead us to ask. 7.2.1 Information Given The sample budget in Figure 8 is a simple one. It doesn’t list as many accounts as you would expect a business to have. However, it will suffice for our discussion. Let’s assume that this business has a fiscal year that runs from July, 2010 to June, 2011. The sample budget gives us: The dollar amounts that were actually spent for each line item in FY10 (the previous fiscal year) The dollar amounts budgeted for each line item when the budget was adopted for FY11 Please click the advert At this point in the fiscal year, the actual amount we believe will be earned or spent by the end of the fiscal year for each line item With us you ca...
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