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Tip Sheet Volume 2:7
Four Views of a Budget
When submitting a proposal to industry,
there are options for presenting the budget. Four views of the
same budget are presented below; however, remember that industry
may request a specific budget format that may not match one of
those presented. This information is intended to serve as examples
that could be submitted to industry, and may not contain all
the required elements needed to receive approval if submitted
with a gold sheet, such as agreements on matching funds, cost
sharing, and salary details. A separate, detailed internal budget
should be prepared and submitted with the gold sheet, along with
a copy of the proposed industry view of the budget.
Fixed
Cost
Budget*: $50,000 |
A fixed-cost budget presents only
one figure to industry--the total cost. No information is provided
to indicate how much of the cost is directed toward salaries,
supplies, or indirect costs. This type of budget is often acceptable
to industry, because industry's main concern is the total cost
of the project.
| Budget*: |
Salary and Benefits |
$15,000 --OR-- |
$21,900 |
| Supplies |
$ 9,247 |
$13,500 |
| Equipment |
$14,600 |
$14,600 |
| Indirect Costs (46%) |
$11,153 Total |
$50,000 |
| Total |
$50,000 |
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In this budget, general categories
are presented, but no detailed information is given about the
exact supplies, equipment, or salaries that are included. This
is the most common type of budget presented to industry. In the
left column, the indirect costs "jump out" of the budget
and take the focus away from the work that will be accomplished,
whereas the right column focuses on the work.
| Budget*: |
Technician Salary (includes
29.18% benefits) |
$10,000 --OR-- |
$14,600 |
| Merit Staff Salary (includes
35.47% benefits) |
$ 5,000 |
$ 7,300 |
| Enzymes |
$ 8,000 |
$11,680 |
| Test tubes |
$ 1,247 |
$ 1,820 |
| Centrifuge |
$10,300 |
$10,300 |
| Water bath |
$ 4,300 |
$ 4,300 |
| Indirect Costs (46%) |
$11,153
Total |
$50,000 |
| Total |
$50,000 |
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Neither view of this budget is recommended with industry. It
contains too much detail and acts as an invitation to scrutinize
and question every expenditure.
| Budget*: |
Analysis One |
$ 250/sample |
$ 4,250 --OR-- |
$ 365/sample |
$ 6,200 |
| Analysis Two |
$1,000/sample |
$15,000 |
$1,460/sample |
$21,900 |
| Analysis Three |
$5,000/sample |
$15,000 |
$7,300/sample |
$21,900 |
| Indirect Costs |
46% |
$15,750 |
Total |
$50,000 |
| Total |
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$50,000 |
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The fee-for-service budget is
presented in two ways. In the left example, the indirect costs
are separated out but not the salaries or supplies needed to
accomplish the service. In the example on the right, the indirect
costs are included in the calculation of the fee rate. For industry,
the second method is recommended.
For questions or assistance
related to budgets, please contact Diane Meyer, (515) 294-5225,
Email: meyerd@iastate.edu
For questions assistance in working with industry, please contact:
Lisa Lorenzen, Phone: (515) 294-0926, Email: llorenze@iastate.edu
*Some numbers are rounded
for presentation purposes. In addition, not all potential budget
categories are shown (e.g. travel, student support, subcontracts,
etc.).
Acknowledgement: Thanks go
to Valrey Kettner, Sonja Klocker, and Wolfgang Kliemann for their
help with this Tip Sheet.
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