Question

Give examples of a “Line Item” and an “Object of Expense” that may be included in a budget?

Answer 1

Line items is a unit of information that can be estimated and allocated on particular cost center and responsibility center through line item budget. It is in form of Monetary value that are estimated and fixed the limit of particular item in budget . These items have own weight so that i cam be presented in budget seperatetaly for comparison with actual cost .Its contains estimate income and expenditure the are expected from particular cost center or division. In budget ,each line item reported for seperate cost division to identify variance and reason of variance.

Object of expenses is part of line item Which is estimated cost allocable on particular cost center or division . example :-

Accounting charges

License fees

advertisement expenses

office expenses like staff salary , meal expenses, office depreciation, office rent, insurance expenses of office items etc

Supplies cost

travelling expenses

vehicle expenses

legal charge

telephone charge

electricity charges

property taxes

other fixed and variable expenditure according to business .