Calculate % Over Budget

Percentage Over Budget Formula:

\[ \%\ Over = \left( \frac{Actual - Budget}{Budget} \right) \times 100 \]

Percentage Over Budget:

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1. What is Percentage Over Budget?

Percentage Over Budget is a financial metric that calculates how much actual spending exceeds the planned budget. It provides a clear measure of budget variance and helps in financial planning and control.

2. How Does the Calculator Work?

The calculator uses the percentage over budget formula:

\[ \%\ Over = \left( \frac{Actual - Budget}{Budget} \right) \times 100 \]

Where:

\( Actual \) — Actual amount spent (in dollars)
\( Budget \) — Planned budget amount (in dollars)

Explanation: The formula calculates the percentage difference between actual spending and the budgeted amount. A positive result indicates overspending, while a negative result indicates underspending.

3. Importance of Budget Variance Analysis

Details: Monitoring percentage over budget is crucial for financial management, helping organizations identify spending patterns, control costs, and make informed budgeting decisions for future periods.

4. Using the Calculator

Tips: Enter both actual and budget amounts in dollars. The budget amount must be greater than zero. The calculator will show the percentage over (or under) budget.

5. Frequently Asked Questions (FAQ)

Q1: What does a negative percentage mean?
A: A negative percentage indicates that actual spending was under budget, meaning you spent less than planned.

Q2: How is this different from percentage variance?
A: Percentage over budget specifically measures overspending, while percentage variance can be either positive (over) or negative (under) budget.

Q3: When should this calculation be used?
A: This calculation is useful for monthly budget reviews, project cost analysis, and any situation where you need to compare actual spending against planned budgets.

Q4: What are acceptable percentage over budget ranges?
A: Acceptable ranges vary by organization and context. Typically, staying within ±5% of budget is considered good financial control.

Q5: Can this be used for revenue comparisons?
A: Yes, the same formula can be used to calculate percentage over budget for revenue by comparing actual revenue against budgeted revenue.