Budgeting Basics and Beyond

3.3. Budget Sheet

A budget sheet should be designed to record the information used by the operating manager and budget preparer. The budgeting sheet should include this information:

• Historical cost records used

• Cost formulas

• Changes in operating conditions

• Foreseeable conditions

A budget data sheet should be prepared for each cost account in each department or cost center. Attached to the data sheet may be graphs, workpaper analysis, mathematical and statistical calculations, and so on. Budget revisions may also be incorporated.

Fixed, variable, and mixed costs are shown on the data sheet. Material, labor, and overhead should be listed. The sheets should be initialed by those preparing and approving them. The allowances specified in the data sheet should be mutually agreed on by the preparer and operating manager.

A typical budget data sheet is shown in Exhibit 3.3.

A budget summary sheet also should be prepared summarizing the department's budget by listing each budgeted cost and the budget allowance based on average activity. The summary sheet summarizes the departmental budget data sheets. The operating departmental manager always should be provided with a copy of the budget summary sheet and budget data sheets.

A budget data book should be maintained to keep the budgeting information in an orderly manner. The book contains the budget data sheets, supporting worksheets and analysis, ...