Enter the cost per unit and quantity of the new program, equipment, or service, as well as the savings into the calculator to determine the budget impact. This calculator can also evaluate any of the variables given the others are known.
Budget Impact Formula
The following formula is used to calculate the budget impact.
BI = (C * Q) - S
Variables:
- BI is the budget impact ($)
- C is the cost per unit of the new program, equipment, or service ($)
- Q is the quantity of the new program, equipment, or service
- S is the savings from the new program, equipment, or service ($)
To calculate the budget impact, multiply the cost per unit of the new program, equipment, or service by the quantity of the new program, equipment, or service. Subtract the savings from the new program, equipment, or service from the result. The result is the budget impact. This calculation helps organizations understand the financial effect of their decisions and prioritize their spending.
What is a Budget Impact?
A budget impact refers to the financial effect that a particular decision, event, or policy has on an organization’s budget. It involves calculating the potential costs and savings associated with a specific action or change, such as implementing a new program, purchasing new equipment, or changing a service. The budget impact analysis is crucial for decision-making processes as it helps organizations understand the economic consequences of their choices and prioritize their spending.
How to Calculate Budget Impact?
The following steps outline how to calculate the Budget Impact.
- First, determine the cost per unit of the new program, equipment, or service ($).
- Next, determine the quantity of the new program, equipment, or service.
- Next, determine the savings from the new program, equipment, or service ($).
- Next, gather the formula from above = BI = (C * Q) – S.
- Finally, calculate the Budget Impact.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
cost per unit of the new program, equipment, or service ($) = 50
quantity of the new program, equipment, or service = 100
savings from the new program, equipment, or service ($) = 5000
