Budgeting for an SAE Project

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

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

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

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

5. 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

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

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

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

9. 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?

10. 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.