What are the items that make up expenditure in a business unit budget are listed with reference to sale and cash outflows?
1. Cost of Goods Sold (COGS): This includes the direct costs associated with producing the goods or services that are sold, such as raw materials, labor, and overhead costs.
2. Operating Expenses: These are the costs associated with running the day-to-day operations of the business, such as rent, utilities, salaries, marketing expenses, and office supplies.
3. Capital Expenditures: These are investments in long-term assets, such as equipment, buildings, or vehicles, that will help the business generate revenue over time.
4. Debt Payments: This includes any payments on outstanding loans or lines of credit that the business has taken out to finance its operations.
5. Interest Payments: This includes any interest payments on debt or loans that the business has taken out.
6. Taxes: This includes any taxes that the business is required to pay, such as income taxes, sales taxes, or property taxes.
7. Dividends: If the business pays out dividends to its shareholders, this would be included as an expenditure on the budget.
8. Other Expenses: This category could include any other expenses that are necessary for the operation of the business, such as insurance, legal fees, or repairs and maintenance costs.
In terms of cash outflows, expenditures would typically include payments for items such as COGS, operating expenses, capital expenditures, debt payments, interest payments, taxes, dividends, and other expenses. These cash outflows would be subtracted from the total sales revenue to determine the net cash flow of the business.