North South University

Project on Master Budget

Submitted to
Faria Islam Rista | Initial: FIR
Lecturer,
Department of Account & Finance
School of Business & Economics
North South University

Submitted by
Team Rangers
Course: ACT 202 | Sec: 06

Name ID
Shibbir Turag 1821583630
Sanjida Rahman Badhon 1821650030
Sanjida Samiha 1821338030
Contents
Direct Materials...............................................................................................................2
Direct Material 1:............................................................................................................2
Direct Material 2:............................................................................................................2
Direct Material 3:............................................................................................................2
Manufacturing Overhead.................................................................................................3
Indirect Materials:...........................................................................................................3
Depreciation Expense:.....................................................................................................3
Monthly Fixed MOH expense:........................................................................................4
Variable Selling and Administrative Expense:..................................................................4
Fixed Selling and Administrative Expense:......................................................................4
Variable Expenses for Each Unit of Product:...................................................................4
Estimated Monthly Sales:................................................................................................5
Budgets.............................................................................................................................6
Sales Budget:..................................................................................................................6
Direct Materials Budget:.................................................................................................7
MOH Budget:.................................................................................................................8
Sn’A Budget:..................................................................................................................8
Cash Budget:..................................................................................................................9
References......................................................................................................................10
 Direct Materials
Direct Material 1:
Direct material item name Coffee Powder
Quantity required for each unit of product 10 g
Desired ending inventory as a percentage 10%
of following month’s production
requirement
Price per unit of direct material 3 taka per gm

Direct Material 2:
Direct material item name Sugar
Quantity required for each unit of product 3g
Desired ending inventory as a percentage 10%
of following month’s production
requirement
Price per unit of direct material 0.085 taka per gm

Direct Material 3:
Direct material item name Milk Powder
Quantity required for each unit of product 9.54 gm
Desired ending inventory as a percentage 10%
of following month’s production
requirement
Price per unit of direct material 0.69 taka per gm

 Total direct material cost for making one unit of Coffee.

Item Name Per Unit Price

Coffee 10*3=30
Sugar 3*0.085=0.255
Milk 9.54*0.69=6.5826
Total 36.8376 Taka

**All direct materials price is taken from [Link]

PAGE 2
 Manufacturing Overhead
 Total MOH = Variable MOH + Fixed MOH.

 Assumed that, indirect materials are the only thing included in our variable MOH.
Some indirect materials for our product are identified, and a rate of variable MOH
cost for each unit of product is assumed.

Indirect Materials:
Item Name Per Unit rate
Plastic hand Gloves 1.3 taka (per pair)
Cleaning materials 0.04
Tissue 0.6
One time coffee cup 0.61
Total 2.55

 We assumed that one pair of gloves will last up to 50 cups of coffee.

 We assumed that we need 10ml dishwashing liquid to clean our counter after every
50 cups of coffee.

Depreciation Expense:
Equipment Name Cost Useful Life Depreciation
Expense
Coffee Maker 23000 8 years 240 per month
Measuring Tools 60 2 years 2.5 per month
Apron 150 6 months 25 per month
Total 267.5

Our total depreciation expense is tk 267.5

**All equipment’s are purchased in January, 2022.
**To be noted that one apron lasts for 6 months, so we will need to buy two aprons in one
year.

PAGE 3
Monthly Fixed MOH expense:
Fixed MOH Expense Item Name Fixed Expense Per Month
Coffee Maker 240 per month
Measuring tools 2.5 per month
Apron 25 per month
Utility Bills 2000 per month
Total 2,267.5

Variable Selling and Administrative Expense:

Items Cost per unit
Delivery 5
Packaging 2
Total 7

 Our variable Sn’A expense consists of only two items, delivery expense per unit
and packaging cost per unit.

Fixed Selling and Administrative Expense:

Social Media Advertising Expense 1000

 Our fixed Sn’A expense consists only one item, Facebook/social media advertising
expense

Variable Expenses for Each Unit of Product:

Direct Material Cost Per Unit 36.8376
Variable Manufacturing Overhead Rate per unit 2.55
Selling and administrative expense per unit 7
Total 46.3876

Our selling price will be 200% of the variable expense of each unit of product.
Selling Price Per Unit= 46.3876*200%
= 92.7752

PAGE 4
Estimated Monthly Sales:
Month Estimated Units of Coffee Sold
January 900
February 1100
March 1000
April 800
May 600
June 650
July 700
August 600
September 800
October 850
November 1000
December 1200
Total 10,200

We have assumed that our estimated units sold based on the demand of coffee over the
year with changes in the weather.

PAGE 5
 Budgets
Sales Budget:
January February March April May June July August September October November December Total
BudgetedSales inunit 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Selling Price PerUnit 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 92.7752 1113.3024
Total BudgetedSales 83497.68 102052.72 92775.2 74220.16 55665.12 60303.88 64942.64 55665.12 74220.16 78858.92 92775.2 111330.24 946307.04

PAGE 6
Direct Materials Budget:
Direct Material 1: (Coffee Powder)
January February March April May June July August September October November December Total
EstimetedUnit of product sold 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Material perunit 10 10 10 10 10 10 10 10 10 10 10 10
ProductionNeeds 9000 11000 10000 8000 6000 6500 7000 6000 8000 8500 10000 12000 102000
AddDesiredEnding Inventory (10%) 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Total Inventory 9900 12100 11000 8800 6600 7150 7700 6600 8800 9350 11000 13200 112200
Material Price per(gm) 3 3 3 3 3 3 3 3 3 3 3 3
Cost 29700 36300 33000 26400 19800 21450 23100 19800 26400 28050 33000 39600 336600

Direct Material 2: Sugar

January February March April May June July August September October November December Total
EstimetedUnit of product sold 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Material perunit 3 3 3 3 3 3 3 3 3 3 3 3
ProductionNeeds 2700 3300 3000 2400 1800 1950 2100 1800 2400 2550 3000 3600 30600
AddDesiredEnding Inventory (10%) 270 330 300 240 180 195 210 180 240 255 300 360 3060
Total Inventory 2970 3630 3300 2640 1980 2145 2310 1980 2640 2805 3300 3960 33660
Material Price per(gm) 0.085 0.085 0.085 0.085 0.085 0.085 0.085 0.085 0.085 0.085 0.085 0.085
Cost 252.45 308.55 280.5 224.4 168.3 182.325 196.35 168.3 224.4 238.425 280.5 336.6 2861.1

Direct Material 3: Milk

January February March April May June July August September October November December Total
EstimetedUnit of product sold 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Material perunit 9.54 9.54 9.54 9.54 9.54 9.54 9.54 9.54 9.54 9.54 9.54 9.54
ProductionNeeds 8586 10494 9540 7632 5724 6201 6678 5724 7632 8109 9540 11448 97308
AddDesiredEnding Inventory (10%) 858.6 1049.4 954 763.2 572.4 620.1 667.8 572.4 763.2 810.9 954 1144.8 9730.8
Total Inventory 9444.6 11543.4 10494 8395.2 6296.4 6821.1 7345.8 6296.4 8395.2 8919.9 10494 12592.8 107038.8
Material Price per(gm) 0.69 0.69 0.69 0.69 0.69 0.69 0.69 0.69 0.69 0.69 0.69 0.69
Cost 6516.774 7964.946 7240.86 5792.688 4344.516 4706.559 5068.602 4344.516 5792.688 6154.731 7240.86 8689.032 73856.772

Total Direct materials Cost 36469.224 44573.496 40521.36 32417.088 24312.816 26338.884 28364.952 24312.816 32417.088 34443.156 40521.36 48625.632 413317.872

PAGE 7
MOH Budget:
January February March April May June July Auguest September October November December Total
EstimetedUnit of product sold 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Variable Cost foreachunit 2.55 2.55 2.55 2.55 2.55 2.55 2.55 2.55 2.55 2.55 2.55 2.55
Variable MOH 2295 2805 2550 2040 1530 1657.5 1785 1530 2040 2167.5 2550 3060 26010
Total FixedMOH 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 2,267.50 27,210.00
Total manufuacturing overheadcost 4562.5 5072.5 4817.5 4307.5 3797.5 3925 4052.5 3797.5 4307.5 4435 4817.5 5327.5 53220
Less Non-cashCost 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5
CashDisbursement forMOH 4295 4805 4550 4040 3530 3657.5 3785 3530 4040 4167.5 4550 5060 50010

Sn’A Budget:
January February March April May June July Auguest September October November December Total
BudgetedSales 900 1100 1000 800 600 650 700 600 800 850 1000 1200 10200
Variable S &ARate 7 7 7 7 7 7 7 7 7 7 7 7
Variable Expenses 6300 7700 7000 5600 4200 4550 4900 4200 5600 5950 7000 8400 71400
FixedS &AExpenses 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 1000 12000
Total S &AExpenses 7300 8700 8000 6600 5200 5550 5900 5200 6600 6950 8000 9400 83400
Less: DepriciationExpenses 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5 267.5
CashS &AExpenses 7032.5 8432.5 7732.5 6332.5 4932.5 5282.5 5632.5 4932.5 6332.5 6682.5 7732.5 9132.5 80190

PAGE 8
Cash Budget:
January February March April May June July Auguest September October November December
Beginning CashBalance 500000 492340.956 516582.68 536554.02 547984.592 550874.396 555899.392 563059.58 565949.384 577379.956 590945.72 610917.06
AddCashCollections 83497.68 102052.72 92775.2 74220.16 55665.12 60303.88 64942.64 55665.12 74220.16 78858.92 92775.2 111330.24
Total CashAvailable 583497.68 594393.676 609357.88 610774.18 603649.712 611178.276 620842.032 618724.7 640169.544 656238.876 683720.92 722247.3
Materials 36469.224 44573.496 40521.36 32417.088 24312.816 26338.884 28364.952 24312.816 32417.088 34443.156 40521.36 48625.632
Manufacturing overhead 4295 4805 4550 4040 3530 3657.5 3785 3530 4040 4167.5 4550 5060
SnAOverhead 7032.5 8432.5 7732.5 6332.5 4932.5 5282.5 5632.5 4932.5 6332.5 6682.5 7732.5 9132.5
Equipment purchase 23360
Dividend 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000 20000
Total Disbursements 91156.724 77810.996 72803.86 62789.588 52775.316 55278.884 57782.452 52775.316 62789.588 65293.156 72803.86 82818.132
Excess 492340.956 516582.68 536554.02 547984.592 550874.396 555899.392 563059.58 565949.384 577379.956 590945.72 610917.06 639429.168
Borrowing
Total Financing
Ending CashBalance 492340.956 516582.68 536554.02 547984.592 550874.396 555899.392 563059.58 565949.384 577379.956 590945.72 610917.06 639429.168

PAGE 9
 References
Conversion tables. (n.d.). Retrieved January 4, 2022, from Chef in Disguise:
[Link]

HOW MUCH COFFEE PER CUP? MEASURES AND RATIOS. (n.d.). Retrieved January 4,
2022, from Espresso & Coffee Guide: [Link]
coffee-per-cup/

PAGE 10
 Appendix
Name Contribution
Shibbir Turag
Sanjida Rahman Badhon Equal
Sanjida Samiha