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Internal Code: MAS7026
Within a company, one would find many types of budget all of which will bear different name tags. The finance budget, the revenue budget, the personnel budget, are just three of the many to be found; but basically, there are only two departmental budgets which should be allowed to exist in isolation from each other. These are the operating budget or the actual running costs of a department and the capital budget, which contains the plans for the acquisition of additional capital equipment to meet the requirements for the expansion of the company, as well as the approved program for the replacement of existing capital assets. The operating budget is the budget which will be prepared to determine the day-to-day costs of a department for the next financial year. Table 1 indicates a budget summary form in which the various grades of labour are listed. The numbers of each grade and their annual rate are multiplied to give totals for each labor grade. These figures are then summed to produce a labor total to which is added an agreed percentage for overtime working. The materials figures indicate those materials directly chargeable to cost codes and those applied indirectly, for example, cleaning materials and small items which do not warrant the cost of individual costing action. The item ‘other costs’ refers generally to the overheads section of the budget and includes part of the overall administration costs, the building maintenance costs relevant to the maintenance area, depreciation costs for the maintenance tools and workshop plant, and a percentage of the rents, rates and services costs applicable to that area of the total plant which is occupied by the maintenance department. The summation of the above items produces a total figure for expenditure in the maintenance department on wages, materials and overheads, to which must be added any special categories such as subcontracted work, special projects and a contingency figure. This contingency should include any expenditure or improvement projects plus an allowance for rises in costs over the period. In the period 1975–85 total maintenance costs have tended to escalate at the rate of 10–20% per year.
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