Page 182 - Finance for Non-Financial Managers

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The Annual Budget: Financing Your Plans
... may be assumed to change in
This line item to be budgeted
relation to
Sales commissions Sales volume, especially if segmented by 163
products commissioned at differing rates
Payroll taxes, health insurance, and Wages and salaries
workers’ compensation insurance
Auto expenses Number of employees reimbursed for such
expenses
Selling expenses Sales volume (in units, if available)
Telephone expense Number of employees with offices and
phones
Plant supervision wages Number of employees with that job title
Factory janitorial services, Square feet of factory space serviced
outsourced
Profit-sharing expense Wages and salaries of eligible employees
Travel expense Number of employee travel days planned*
Sales taxes Taxable sales
Utilities Square feet of space occupied (plant vs.
office)
Property taxes Square feet of space occupied
Building repairs and maintenance Square feet of space occupied
Machine repairs and maintenance Machine hours in use or available
Telephone expense in the sales Number of full-time-equivalent salespeople
department
* This can be further refined by intrastate, national, and international travel days.
Figure 10-2. Cost relationships that facilitate sound budgeting

Imagine how you’d feel if the next thing you heard was
your manager telling you that you need to cut 10% from your
budget, without any reduction in the goals for which you will
be held accountable. If you’ve been in the corporate world for