Page 31 - Budgeting for Managers

with the large ones, at 20%. But we have no reason to think
repair costs will go up. We’re nearly finished. The only line left is
for sales tax. The sales tax line is a bit different from the other
lines, because it is based on a calculation using the figures from
14 Budgeting for Managers
other lines. We can add up any line items that require sales tax
and multiply the results by the local sales tax percentage. (State
laws vary on which items are taxed.) If you’re working with a
spreadsheet, you can simply enter a formula to perform this
calculation for you. In Table 1-3, those line items are in italics.
To make it interesting, let’s say that last year sales tax was 6%,
but this year it’s increasing to 8%.

Print Shop Expenses 2002 Actual 2003 Estimated
Equipment leases TEAMFLY $2,400
$3,600
Toner 900 1,080
Plain paper 300 360

Special papers 60 72
Equipment purchase 600 950
Service contracts 1,500 1,600
Equipment repair 350 350
Miscellaneous 150 180
Sales tax 142 239

Total expenses $7,602 $7,231
Table 1-3. Print shop expenses (items with sales tax in italic)

Take a look at the sales tax line (in bold). In 2002, sales tax
was 6% of the total of the six taxable line items in italics. In
2003, we use the new figures for each line, and we use the new
tax rate of 8%. Take a moment to copy these numbers into your
own spreadsheet or to use a calculator and check the figures. (If
I made a mistake, send me an e-mail!)

Step 6: Adding Budgetary Assumptions
A budget is more than just numbers. Your sources of informa-

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