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hi friends, I wish to know more about budget allocation...its methods...process and what al to be consider while allocating budget etc. It will be helpful if you can help me in this regard. DEEPAK
From India , Bangalore
Hi allocation is a method of distributing the cost to the non profit making department. You decide the key driver to distribute the cost to dept.
Drivers for distribution may be manpower, contracts etc.
Got it required clarification call me on 9833897611

From India , Mumbai
hi,
budget consists fixed and variable costs, variable cost directly allocated to products based on consumption of each raw/packing materials etc...which caluculated based on BOM. in case of fixed cost, intially the cost is allocated to respective cost centers based on expected resoureses consumed by each CC and these CC divided in to two catogoreis primary and secondary CC. primary CC cost directly allocated to product based Machine HR consumed by each respective product and in case Secondary CC intially these CC cost is allocated to primary CCs as well as secondary CCs based on variuos drivers [ABC] we have given eg: Canteen CC cost is allocated based on no of personals.................
keep posting for any clarification
or call 9652233537

From India , Hyderabad
Budgetary allocations are integral components to an annual financial plan, or budget, of all organizations. They indicate the level of resources an organization is committing to a department or program. Without allocation limits, expenditures can exceed revenues and result in financial shortfalls. Anyone working with budgets should understand how they are used and the limitations they provide.
A budget is a financial plan used to estimate revenues and expenditures for a specific period of time. It is a management and planning tool, not just an accounting document. It assists in the allocation of resources.
A budget allocation is the amount of funding designated to each expenditure line. It designates the maximum amount of funding an organization is willing to spend on a given item or program, and it is a limit that is not to be exceeded by the employee authorized to charge expenses to a particular budget line.
Developing Budgetary Allocations
Budgets are usually developed for 12-month periods. When developing a budget, revenues are usually estimated first to determine the level of resources that will be available in the upcoming budget year. Based on the estimated resources, expenditure limits, also called budgetary allocations, are assigned to each budget category. When developing budgetary allocations, all needs of the organization are taken into account and decisions are made where best to allocate available money.
Budget Category Allocations
Budgets are usually divided into departments and program units. This allows for easier identification of the resources allocated to specific programs and functions. Each category can be made of several budget allocations, referred to as line items, for the specific needs necessary to support the program or overall department operation.
Adjusting Budgetary Allocations
Budgetary allocations might not always be sufficiently estimated. This can happen when adequate funding for predictable or reoccurring expenses are not included in the budget. This might require the budget to be modified after adoption to account for the shortfall. Typical corrections will include transferring funds from other allocation categories or from the organization's surplus, sometimes referred to as savings.
Just as budgetary allocation estimates can be insufficient, revenues can be underestimated. This can happen if a downturn in the economy occurs after a budget is adopted, thus harming revenue streams. Insufficient revenues might require the need to reduce budgetary allocations in order for expenditures not to exceed revenues at the end of the budget year.
Monitoring Budgetary Allocations
Budgetary allocations should be routinely monitored to ensure the amounts budgeted are sufficient to meet expenditures. It is important to have a tracking system in place for all purchase orders and bills. The purchase orders and bills should be matched regularly against the budgetary allocation to ensure sufficient funds exist for the remainder of the budget year.

From India,
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