MGMT 408 Week 5 Budget Preparation Tutorial
990600125095 91440099084 1066776100354 1123950106704 914400231812 1066775100354 914400116229 914400238137 106680023327211523461109572 MGMT408 Budget Tutorial Transcript Slide 1 No audio Slide 2 Our example will be a very simple one in order to introduce you to the concepts behind budget preparation and estimation. The example uses simple calculations to estimate different account costs for the coming year. Be aware that not all budget items require calculations to obtain an estimate. For example, the company needed a larger phone system in 2010. Instead of buying a system we chose to lease a system. That made our lease payments in 2010 almost double what they were in 2009. If we use calculations we will estimate that our lease payments in 2011 will be double what they were in 2010 –obviously not correct. Part of the budgeting process is to apply common sense to all estimates. Use calculations where appropriate and other methods (historical records, experience, “rules of thumb”, etc.) when necessary. There are two budgeting
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