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Based on the below table. Can you please clarify the below question based on the existing budget? Why is it important to prepare an IT
Based on the below table. Can you please clarify the below question based on the existing budget?
- Why is it important to prepare an IT budget?
- What are some key takeaways from this budget example?
- What types of details seem to be missing from this budget?
- What is the purpose of the internal charge-back and how would you communicate this to those receiving the charge?
- If your leadership team asked you to cut your budget by 5%, what steps would you take?
- What types of backup information you would need to support your budget process?
Topic 6 | |||||
GOAL, Inc. IT Budget | |||||
Annual Budget 2021 | Comments | Actual Cost 2021 | Variance | ||
Committed Expenditures | |||||
Service Contracts | 50,000 | 50,000 | |||
Repairs | 5,000 | 5,000 | |||
Leases | 15,000 | 15,000 | |||
Software | 20,000 | 20,000 | |||
Internal Support | 40,000 | 40,000 | |||
External Support | 23,000 | 23,000 | |||
Depreciation | 13,500 | 13,500 | |||
Supplies | 400 | 400 | |||
Training | 2,000 | 2,000 | |||
TOTAL COMMITED EXPENDITURES | 168,900 | - | 168,900 | ||
Upgrades | |||||
CPU Upgrades | 4,220 | 4,220 | |||
Memory Addition | 5,000 | 5,000 | |||
TOTAL UPGRADES | 9,220 | - | 9,220 | ||
Replacements | |||||
Depreciation | 4,000 | 12 servers @ $1,000 each depreciated over 3 years | - | 4,000 | |
Implementation Costs | 3,200 | 3,200 | |||
Leases | 3,000 | 3,000 | |||
TOTAL REPLACEMENTS | 10,200 | - | 10,200 | ||
- | |||||
New Projects | - | ||||
Capital Cost of New Hardware | - | ||||
Depreciation | 5,000 | 1 server @ $20,000 depreciated over 4 years | - | 5,000 | |
Implementation Costs | 3,200 | 3,200 | |||
Leases | 3,000 | 3,000 | |||
Internal Support | 20,000 | 20,000 | |||
TOTAL NEW PROJECTS | 31,200 | - | 31,200 | ||
- | |||||
TOTAL COSTS | 219,520 | - | 219,520 | ||
- | |||||
Internal charge-back | - | ||||
Department A (25% utilization) | (54,880) | - | (54,880) | ||
Department A (25% utilization) | (109,760) | - | (109,760) | ||
Department A (50% utilization) | (54,880) | - | (54,880) | ||
(219,520) | - | (219,520) |
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