Example of a Miscellanous Expense

Miscellaneous Expenses - from Operating Expense Budget

Murray recently ran into Bill, an old friend, who he hadn't seen for quite some time. In their conversation, Murray indicated that he was planning to start a business. Bill, a businessman for many years, thought it was his responsibility to offer Murray some helpful hints. Murray was quite grateful and listened intently. As the conversation was ending and both parties were saying their good byes, Bill said:

"By the way Murray, don't forget to forecast for expenses that you may have overlooked. These expenses can be classified as Miscellaneous Expenses. Since your business seems rather simplicity, I suggest you budget $200 per month for Miscellaneous Expenses".

On his way home, Murray thought about what Bill had suggested and decided to take Bill's advice. Further, Murray will forecast his Miscellaneous Expense at $200 per month in 200X and $300 per month in 200Y. Therefore, the 200X Forecasted Cash Flow Statement will show monthly Cash Outflows of $200 for Miscellaneous Expenses. Also, his total "Miscellaneous Expense", appearing on the 200X Forecasted Income Statement, is expected to be $1,200 (IE $200 per month x 6 months = $1,200).

In addition, Murray's 200Y Forecasted Cash Flow Statement will show a Cash Outflow of $300 each month for Miscellaneous Expenses. And the 200Y Forecasted Income Statement will show "Miscellaneous Expenses" totaling $3,600 ($300 per month x 12 months = $3,600).

Categories: Forecasting