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<ManualTopic ID="/baanerp/tg/ebm/ff/ff002740" xml:lang="en">
   <Header>
      <Title>Function: Project budgeting</Title>
      <Keyword type="header" order="d1e1946312">
         <Level1>Project budgeting</Level1>
      </Keyword>
   </Header>
   <GeneralSection>
      <Paragraph>The objective of this main business function is to calculate
		costs and actual prices by project and by item, and to link additional
		surcharges to a project.</Paragraph>
      <List>
         <ListIntro>The following fundamental distinction can be made between two
		  types of costs:</ListIntro>
         <ListItem>Direct costs: Used to input or calculate a cost such as labor
		  and materials.</ListItem>
         <ListItem>Calculated costs: Surcharges based on budget-lines, typically
		  including all overhead and burdens that are usually referred to as derived
		  costs.</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Process: Project budgeting, process (code:
		MPR03a)</SectionTitle>
      <Paragraph>In this process flow, resources can be allocated to the elements
		of the work breakdown structure. If a relationship exists with an
		organizational breakdown structure, the budget is automatically assigned to the
		elements of that structure.</Paragraph>
      <Paragraph>The types of budgeting are top-down budgeting and bottom-up
		budgeting.</Paragraph>
      <Paragraph>Top-down budgeting means a budget amount is assigned to the top
		of the structure and allocated to the lower level elements. The amounts can be
		based on the actual cost of a previous, similar project. Top-down budgeting is
		frequently used to budget total project costs when there is a limited amount of
		detailed information about the project.</Paragraph>
      <Paragraph>Bottom-up budgeting means that the costs of individual work
		items or grouped cost items are allocated, combining the individual elements to
		attain a project total.</Paragraph>
      <Paragraph>With this method, the costs of individual work packages or
		grouped cost objects are budgeted and summarized, or rolled-up to the
		individual elements, to get a project total. These costs include direct costs,
		for example, labor or materials, and indirect/calculated costs, for example,
		overhead surcharges on direct costs. If the budget is linked to an Organization
		Breakdown Structure (OBS), the budget is automatically assigned to the various
		OBS elements, which enables departmental responsibility for a specific
		budget.</Paragraph>
      <List>
         <ListIntro>
            <GUIRef href="" role="manual">Assumptions:</GUIRef>
         </ListIntro>
         <ListItem>LN Project will serve as the supporting
		  functionality.</ListItem>
      </List>
      <List>
         <ListIntro>
            <GUIRef href="" role="manual">IT support:</GUIRef>
         </ListIntro>
         <ListItem>LN Project, Budgeting</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <SectionTitle>Process: Project budgeting, product (code:
		MPR03b)</SectionTitle>
      <Paragraph>In this function, you can set up a budget and also enter budget
		details into the system. The objective of this process is to provide updating
		possibilities for the initial estimate that is calculated during the quotation
		phase. After a quotation is accepted and has become a project, the budget must
		be updated. At this point, the budget can be finalized/frozen.</Paragraph>
      <List>
         <ListIntro>
            <GUIRef href="" role="manual">Assumptions:</GUIRef>
         </ListIntro>
         <ListItem>Manufacturing project control functionality will serve as the
		  supporting functionality.</ListItem>
      </List>
      <List>
         <ListIntro>
            <GUIRef href="" role="manual">IT support:</GUIRef>
         </ListIntro>
         <ListItem>LN Manufacturing, Project Control</ListItem>
      </List>
   </GeneralSection>
</ManualTopic>