Budgeting

8. Actual Expenditure

Comparing your actual expenditure with budget also helps you to improve your ability to predict future costs accurately.

8.1 How did your fixed costs differ from budget?

• Some fixed costs suddenly increase to a new level as the business grows.

8.2 Were your variable costs in line with budget?

• Normally variable costs adjust in line with sales volumes achieved ('usage variance').
• Analyse the reasons for any change in the relationship between costs and turnover ('price variance').Have unit costs changed (and are the new unit costs likely to continue in future)? Has the efficiency you use resources with changed?

8.3 Were there any differences in the timing of expenditure?

• Were any costs brought forward or delayed?
• Have suppliers' payment terms or your payment policies changed?

8.4 How did costs vary in different parts of the business?