You know that SG&A line on the income statement? Well, it stands for Sales, General, and Administrative, and this budget simply prognosticates what a company will spend in the next ninety-one-ish to three hundred sixty-five-ish days.
It answers such fetching questions as, "what will rent cost?" and "how much will our insurance be?" and "what will we spend on lawyers?" The admin budget does not include the people who actually make stuff for the company. It just covers the bureaucrats who do nothing productive, other than organize the work of the people who actually add direct value to the company itself.
At Shmoop, the administrative budget applies to bureaucrats managing contractors, and doesn't cover the cost of the writers, editors, and artists who actually make the fine Shmoop product you dearly love.
Related or Semi-related Video
Finance: What is a Budget?43 Views
Finance a la shmoop what is a budget? that's that thing you throw right out [Woman throws budget out the window]
the window just before you start doing all your Christmas shopping
right but generally it's a plan that lets you see where your money will be
spent if you have a personal budget well you'll be able to decide ahead of time [Personal budget example]
how much money you'll spend on clothes, food, megaphones to annoy and anger your
neighbors and you know whatever floats your boat if you own a company well
you'll probably have much more complicated budget for things like
advertising and lawyer fees either way the plan helps you make sure that you
have enough moolah for everything you need and maybe some leftover for stuff
you want.....Joan wants to control her money so she decides to set up a budget for [Joan setting up a budget on a laptop]
next month she makes a thousand bucks from her summer job and well here's what
her budget looks like.....
Now Joan knows exactly where every penny is gonna go she's not [Joan driving a car]
gonna be caught off guard by any surprise expenses she's not gonna spend
$200 on safecracking equipment and then realize she doesn't have enough left [Joan stood beside a vault of gold bars]
to pay her phone bill although if she does get hit with some unexpected
expenses well hopefully yeah she can just pawn some of those exotic vases she
took from the Peterson place [Joan holding a vase]
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