When you are creating a project budget, Excel can be a handy tool for you. Today we are going to show you how to create a project budget in Excel effectively with appropriate illustrations. For preparing examples and workbooks weâ€™re using Microsoft 365 version. You can choose your version.

Hereâ€™s an overview of the dataset for todayâ€™s task.

## Introduction to Project Budget

A project budget includes all of the financial information necessary to run a successful project, from resources to materials, as well as estimates of all project expenditures.

Use this Excel budget to keep track of project spending. You must carefully monitor the project’s budget to prevent cost overruns.

Tasks that result in the completion of a project or service make up a project. That procedure costs money. Resources are required, including the hiring of a project team, potential vendor contracts, potential parts, and a wide range of other costs that must be paid and kept track of.

Letâ€™s say, we have a dataset that contains information about the **Project Budget **of the **XYZ group**. From our dataset, we will create a project budget in Excel. We can easily create a project budget in Excel by using **the SUM** **function** and mathematical formula.

## Step 1: Creating a Project Budget Header

In the first step, you will have to insert headers to create a project budget and then format them in Excel. Letâ€™s follow the instructions below to learn!

- First of all, we will give a header for the summary and project details. Hence, we will format those headers as we want from the
**Home**tab.

- Further, we will create a header for cost calculation. For instance, serial number, particulars, material cost, labor cost, fixed cost, miscellaneous cost, budgeted amount, actual amount, and variance. After that, we will format those headers as we want from the
**Home**tab.

**Read More:** How to Create an Operating Budget in Excel

## Step 2: Calculating Project Budget

In this section, we will calculate the project budget. To do that, we will divide our project into three functions, named **Function 1, Function 2, **and **Function 3**. Firstly, we will calculate the total cost of function 1. Hence, we calculate the cost of the rest of the functions. Letâ€™s follow the instructions below to learn!

- First, select cell
**J12**and write down the below mathematical formula in that cell.

`=(D12*E12)+(F12*G12)+H12+I12`

- Where,
**D12 =**units of materials, **E12 =**per unit cost of materials,**F12 =**units of hours,**G12 =**per unit cost of hours,**H12 =**the fixed cost of the project, and**I12****=**the miscellaneous cost of the project.

- Hence, simply press
**ENTER**on your keyboard. As a result, you will get the budgeted amount which is the return of the mathematical formula. The return is**$15,480.00**.

- Hence,
**AutoFill**the formula to the rest of the cells under**Function 1**in column**J**.

- Now, we will calculate the variance. To do that, write down the below subtraction formula in the cell. After that, press
**ENTER**on your keyboard.

`=J12-K12`

Where **J12 **is the Budgeted amount and **K12 **is the actual amount of the project.

- Further,
**AutoFill**the formula to the rest of the cells under**Function 1**in column**L**. - After that, we will calculate the total
**Fixed Cost**of function 1. To do that, we will apply the**SUM**function. The**SUM**function is,

`=SUM(H12:H14)`

- Hence, simply press
**ENTER**on your keyboard. As a result, you will get the total**Fixed Cost**of function 1. Which isÂ**$11,300.00**.

- Further,
**AutoFill**the**SUM**function to the rest of the cells under function 1 in**row 15**to calculate the total miscellaneous cost, total budgeted cost, total actual amount, and total variance. - Similarly, do the above process for
**Function 2**and**Function 3.**

- Now, we will calculate the total cost of the project. To do that, write down the below addition.

`=H15+H19+H23`

- Where
**H15 =**the total fixed cost of function 1, **H19 =**the total fixed cost of function 2, and**H23 =**the total fixed cost of function 3.

- Hence, simply press
**ENTER**on your keyboard. As a result, you will get the total fixed cost of the project. The total**Fixed Cost**of the project is**$29,800.00**.

- Further,
**AutoFill**the**SUM**function to the rest of the cells in**row 24**to calculate the total miscellaneous cost, total budgeted cost, total actual amount, and total variance.

**Read More: **How to Create a Construction Budget in Excel

## Step 3: Making a Summary of the Project Budget

In this section, we will calculate the summary of the project budget. This is an easy and time-saving task as well. Letâ€™s follow the instructions below to learn!

- First of all, select cell
**E5**and write down the below formula in that cell.

`=J24`

Where **J24** is the total budgeted cost of the project budget.

- After that, press
**ENTER**on your keyboard. So, you will get the total budgeted cost of the project budget. Which is**$107,787.50.**

- Hence, select cell
**E6**and write down the below formula in that cell.

`=K24`

Here, **K24** is the total actual cost of the project budget.

- After that, press
**ENTER**on your keyboard. So, the total actual cost of the project budget is**$98,500.00.** - Further, select cell
**E7**and write down the below formula in that cell.

`=L24`

Where **L24** is the total variance cost of the project budget.

- After that, press
**ENTER**on your keyboard. As a result, you will get the total variance of the project budget which is the return of the formula. The return is**$9,287.50.** - Finally, we will get the summary of the project budget.

**Read More: **How to Create a Business Budget in Excel

## Project Cost Template in Excel

You can use todayâ€™s workbook as a template to calculate the project budget. There is a sheet named **Template.**

Explore that sheet. You will find fields for **units **of materials, **per unit cost **of materials, **units **of hours, **per unit cost** of hours, fixed cost, miscellaneous cost, budgeted amount, actual amount, and variance of the project. Insert your values. It will calculate the **total budgeted cost**, **total actual cost, **and **variance **of the project budget given in the below screenshot.

## Bottom Line

👉 **#N/A!** error arises when the formula or a function in the formula fails to find the referenced data.

👉 **#DIV/0!** error happens when a value is divided by **zero(0)** or the cell reference is blank.

**Download Practice Workbook**

Download this practice workbook to exercise while you are reading this article.

## Conclusion

I hope all of the suitable steps mentioned above on how to create a project budget in Excel will now provoke you to apply them in your spreadsheets with more productivity. You are most welcome to feel free to comment if you have any questions or queries.

**Related Articles**

- How to Prepare Budget for a Company in Excel
- How to Prepare Annual Budget for a Company in Excel
- How to Create a Zero-Based Budget in Excel
- How to Calculate Remaining Budget Using Formula in Excel

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