Budgeting for an SAE Project Modified by Georgia Agricultural Education Curriculum Office July, 2002

Objectives:  Define budget  Explain budgeting process  Explain types of budgets  Complete a partial decision  Complete a cash flow budget

BUDGET  A plan for income and expense over a given period of time.

Purposes of budget:  Assist in decision making –Go/No go decisions –Compare alternatives –Best combination of resources –Plan financing

Budgeting Process:  Forecast types of expense items  Estimate amounts of each input –previous records –efficiency factor tables –estimate costs of each input –get prices from suppliers  Estimate amount of goods and services that should result –previous records –efficiency factor tables –Estimate income from each good or service –Subtract forecast expenses from forecast income

Partial Budget  Compare effects of alternative solutions to a single decision. Should I purchase the 42" riding mower or the 30" riding mower?

Unit Budget  Estimate income and expenditures for the fiscal or calendar year at the unit level, such as per acre.

Enterprise Budget  Estimate income and expenditures for the fiscal or calendar year for the specific enterprise, such as my snow removal enterprise

Total Budget  Estimate total income and expenditures for the fiscal or calendar year for the person or family. What net income can I expect for the year from all my combined efforts?

Cash Flow Budget  A budget in which income and expense forecasts are allocated by week, month, quarter, or other period as appropriate to the business.