103867784 a Project Report on Budgetary Control at Ranna Sugars 2111

7/22/2019 103867784 a Project Report on Budgetary Control at Ranna Sugars 2111

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A STUDY ON BUDGETARY CONTROL at RANNA SUGARS

CONTENTS

SL NO PARTICULAR PAGE NO

1 Executive Summary 1

O!"ective O# t$e Stu%y

& I'tr(%ucti(' &

) I'%u*tria+ Pr(#i+e )

, C(m-a'y Pr(#i+e .

. Or/a'i0ati(' Pr(#i+e

I'tr(%ucti(' t( Bu%/etary C('tr(+ &23,4

2 Data A'a+y*i* a'% I'ter-retati(' ,13.1

5 6i'%i'/* .

14 Su//e*ti(' .&

11 C('c+u*i(' .)

1 Bi!+i(/ra-$y .,

1& A''exure ..

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E8ECUTI9E SU::ARY

RANNA SUGARS. Is the co-operative company. The project has been undertaken on the

topic A STUDY ON BUDGETARY CONTROL at RANNA SUGARS As budetary

contro! he!ps to understand oa! o" the concern #hether it may be short or !on term oa!.

As the budet is p!ayin an important ro!e in any orani$ation #hich he!ps to compare the

actua! per"ormance #ith the budeted per"ormance .The concept o" the %udet and #ay o"

adaptabi!ity& #hich creates ne# cha!!enes to industria! sector "or survivin in this current

competitive ede. It indicates the proress o" the concern by #ay o" its sa!es or pro"it& market

shares& process o" the concern etc.

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OB;ECTI9ES O6 T


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INTRODUCTION=

%udetary contro! is the important aspect "or industry deve!opment because budets

provide yard stick aainst #hich the actua! per"ormance is measured. It a!#ays he!ps to the top

manaement to take the appropriate decision to motivate and directin their personne! to#ards

#e!! set p!ans and po!icies o" the company.

%y considerin the advantae o" the budetary contro! the Ranna Suars a!so adapted

this system. In Ranna Suars they #ere maintainin the month!y budet #ith the he!p o" dai!y

reports. The dai!y reports must contain the item !ike production e""iciency& suar cane

uti!i$ation& man po#er re2uirement& consumption o" e!ectricity& #aes etc. 3ith this the

budetary contro! manaer prepares a month!y pro"itabi!ity statement o" a particu!ar month *

submitted that one o" the appropriate authority !ike production manaer. %y this statement or

submitted report& they #i!! take correct decision about the orani$ationa! activities.

A study has been conducted on the 4%U/G5TAR6 +NTR78 #hich is most

probab!y adopted in the Ranna Suars orani$ation.

%udetary contro! i.e. a most po#er"u! too! to the manaement "or per"ormin its "unction

i.e. "ormu!atin p!ans& coordinatin activities and contro!!in operations etc& e""ective!y as #e!!

as e""ective!y.

No# a day& the number o" companies are compete #ith each other "or the surviva! in thepresent market. 3hether it may be other suars industries .but no one company can comete

#ithout proper p!annin. So the +ost-%udetary contro! may he!p them to make proper decision

in the number o" various "ie!ds.

%udetary contro! is app!ied to a system o" manaement * accountin contro! by #hich

a!! operations * output are "orecasted as "or ahead as possib!e. And actua! resu!ts are kno#n

that are compared #ithout budet estimates.

The budetary system interates key manaeria! "unctions as it !inks top manaement0s

p!annin "unction #ith the contro! "unction per"ormed at a!! the !eve!s in the manaeria!

hierarchy. A more accurate budet can be deve!oped "or those activates #here direct

re!ationship e)ists bet#een inputs * outputs. These input& output are base "or deve!opin

budets * e)ercisin contro!.

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INDUSTRIAL PRO6ILE

I'%ia' *u/ar i'%u*try

India is the !arest consumer * second !arest producer o" suar in the #or!d.

The Indian suar industry second !are aro industry 7ocated in the rura! India. The

Indian suar has a turnover o" rs.9:: bi!!ion per annum * it contributes a!most rs.''.9 bi!!ion to

the centra! * state e)che2uer as ta)& cess * e)cise duty every year. Indian suar industry has been

a "oca! point "or a socio-economic deve!opment in the rura! areas. About 9: mi!!ion suarcane

"armers * a !are number o" aricu!tura! !abors are invo!ved in suarcane cu!tivation * anci!!ary

activities& constitutin ;.9 < o" the rura! popu!ation. %esides& the industry provides emp!oyment to

about ' mi!!ion ski!!ed=semi-ski!!ed #orkers * others most!y "rom the rura! areas. The industry not

on!y enerates po#er "or its o#n re2uirement but surp!us po#er "or e)port to the rid based on by-

product-baasse. It a!so produces ethy! a!coho!& #hich is used "or industria! *portab!e uses&* can

be used to manu"acture ethano!& an eco!oy "riend!y *rene#ab!e "ue! "or b!endin #ith petro!.

The suar industry in the country uses on!y suarcane as input> hence Suar +ompany0s

have been estab!ished in !are suarcane ro#in states !ike Uttar ?radesh& @aharashtra&

arnataka& Gujarat& and Tami! Nadu * Andhra ?radesh. In the year '::9-:B these si) states

contributed more than C9 < o" tota! suar production in the country> Uttar ?radesh& @aharashtra *

arnataka toether contribute more than B9 < o" tota! production



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Pr(%uct Pr(#i+e=

The main * direct product o" the suarcane is a suar. The "actory has by-products !ike

disti!!ery& arrack& co-eneration * ethano! etc.

Suar disti!!ery

7 arrack

@ compost

S1 po#er by +o-eneration

S ethano!

7D!are @Dmedium S1Dsma!! S'Dsma!!'

Si$e o" basE 9:k *1::k

?ackinE p!astic * jute bas.

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@AIN ?R/U+TIN %6 ?R/U+T

SUGAR+AN5


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CO:PANY PRO6ILE=

7+ATIN E The RA6ATAR SAFAARI SAR5 ARFAN5

N6I6A@IT RANNA NAGAR T@@A?UR

actoryE Timmapur @udho!& T2E @udho!

/istrictE %aa!kot

5STA%7ISF5/ IN E '9=11=1

R5G5ST5R5/ N E /S=R5G=1C'-C,

35576 F7I/A6 E SUN/A6

3RING SFIT E am to 1' pm& 1' pm to C pm& C pm to am

+FAIR@AN E R.S.Ta!e#ad

HI+5 +FAIR@5N E Anant Rao Gorphade

@./ E S.S.?ujari

INAN+IA7 INSTITUTIN E The arnataka State +o-operative suar actories

TF5 +@?AN6 & %ana!ore

%AN5RS TF5 E I/%I %ana!ore

+@?AN6 /.+.+ %ank Timmapur&

/.+.+.%ank @udho!

/++ %ank %ijapur

ARA5 ?5RATIN E Andra ?radesh& Uttar ?rades& Tami!nadu& @aharashtraNATINA776( %ihar

7+A776( E @udho!& %aa!kot&%i!ai& Jamakhandi& %adami

A3AR/ E 4?ARTFA SARATFI8

+@?RTATRS E Nirani suars

?rabhu!inesh#ar suar ?vt

3R5RS E ; &

N SFAR5F7/5R E 1:C''

?R/U+T E Suar

%6 ?R/U+T E T#o Types ?roduct

@o!asses

%aasse

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ORGANISATIONAL PRO6ILE

+hairman E Shri. R.S.Ta!e#ad

Hoice chairman E Shri& AnantRao Ghorpadhe.

@anain /irector E Shri& S.S.?ujari

%oard o" /irectors E Shri& Ashok @ ?ati!.

Shri& Uday H Sar#ad

Shri& .S.?ati!

Shri& G.?.?ati!

Shri& 7.S.+hinnanavar.

Shri& Ramesh. Tuna! Shri& 7.S.Ta!e#ad.

Shri& Rajuouda ?ati!.

Shri& /ayanand ?ati!.

Fead o" /epartmentE

inance E Shri& S..u!karni.

Administration E

+ane section E

?roduction E Shri& R.N.?ati! +hie" enineer(.

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BAC>GROUND AND INCEPTION O6 T


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1:< @ember shares Rs.&;'9 corers

,:< Government Rs.1&1;9 corers

B: ?roduction department is divided in to t#o sections.

a(5nineerin department

b(@anu"acturin department

a( 5nineerin /epartment.

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PRODUCTION DEPART:ENT

LABORATORY INC


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STRUCTURE=

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+FI5 5NGIN55R

@5+FANI+A7

S5+TIN

575+TRI+A7

S5+TIN3RSF? STR5 S5+TIN

+AN5

35IGF@5NT

+AN5

UNF7/ING

URANG@5NTS

+AN5

?R5?ARATIN

@I77ING

%I75R S5+TIN

?35R

G5N5RATIN


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:ec$a'ica+ *ecti(' =

This inc!udes a!! the mechanica! process that is riht "rom the cane #eihment ti!! mi!!in

obtainin o" suar juice ( "or "urther processin. This section inc!udes main steps they are..

a. +ane #eihment arranements

b. +ane un!oadin arranement

c. +ane preparation

d. @i!!in

Ca'e ei/$me't Arra'/eme't*=

+ane #eihment is tota!!y computeri$ed process. Fear the cane #eihtment is carried

throuh e!ectronic p!at"orm ca!!ed 4#eihs bride8. This e!ectronic p!at"orm is o" t#o types. ne

#ith the capacity o" : tons "or !orry and tractors and other #ith a capacity o" 1: tones "or on!y

cart.

Fear a"ter #eihin the cane a s!ip is provided so that particu!ar "armer #hich has the

detai!s o" tota! #eiht o" the cane& tota! trips& timin& vehic!e number& variety o" suarcane and

other detai!s. And a"ter this #hen the vehic!e comes back a"ter un!oadin the suar cane& empty

vehic!e #eiht a!! their data stored in the computer and "ina! copies are !isted "or "urther actions.

Ca'e u'+(a%i'/ arra'/eme't*=

Fear the #eihed suar cane is un!oaded and sent "urther "or cane preparation. urther

un!oadin cane there are ' un!oaders #ith the he!p o" s!in attached instruments cane is !oadin on

the "eedin tab!e.

Ca'e -re-arati('= A"ter "eedin the suar cane on "eedin tab!es #ith the he!p o" !eve!ers #hich avoid

over!oadin o" suar cane is sent to primary cutter& #hich cut the suar canes in to sma!! pieces&

"urther "ine "ibers are obtained "rom there process by passin them in the "ibri$er.

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:i++i'/=

A"ter "ibri$erin the cane passin the prepared "iber cane throuh a set o" mi!!s carries on

mi!!in #eihted hot #ater is a!so added in the course o" crushin "or better e)traction o" juice.

A"ter crushin the juice is sent "or "urther process

P(Fer /e'erati('

?rocess chart o" +o-eneration

3ater treatment

@ake up #ater

eed #ater tank

/eareator tank

OFeatin 11::

+P

?umpin

Stream drum

Turbine

Generator Oe!ectricityP

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6u'cti('* (# -(Fer /e'erati(' %e-artme't are /ive' !e+(F7

To enerate po#er at hih 2uantity.

To distribute it to di""erent areas& as ?T+7.

To provide better #orkin conditions to their #orkers "or sa"ety.

@3& 11 H turbo a!ternator usin "or home consumption.

Around C.9 @3 is e)ported to ?T+7.

?o#er production 1'.9 @3 per hour.

St(re* Secti('

Harious section spare parts are stored in sta!! system and a!! the units are computeri$ed and

iven a code number. %in card and other system are "o!!o#ed hear. These stores materia!s are

norma!!y re2uired "or preventive maintenance durin seasons and o"" seasons "or servicin and

overa!!in

6u'cti('

1( To make the materia! re2uisitions "or the purpose o" kno#in the 2uantity materia!.

'( To make purchase order or in simp!e terms the tender.

,( To make approva! memo "or veri"ication o" materia!s.

( The main "unction o" store department is to prepare a bin card.

9( The store department issued materia! #ith re"erence #ith store re2uisition.

B( To make c!assi"ication * codi"ication o" materia!s.

;( Receipt o" materia!.

C( Inspect it #ith ordered 2uantity& 2ua!ity * i" any other speci"ications.

( Some o" the materia! !ike chemica! is to be sent to !aboratory "or incepatation * testin.

1:( Gettin indents "rom departmenta! head * issuin it.

11( To make purchase return i" the materia! are rejected.

1'( To maintain minimum !eve! o" materia!s.

1,( In"rinin purchase department #hen materia! re2uired

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Structure

Store section is a!so important section in the administrative department. A!! types o"

materia!s are kept in this section. 3hich are re2uired "or the "actory smooth runnin. The section

#orks day and niht. Shi"t is chanin every C hours. This section is maintained by the stores

keeper. The main #ork o" this section is providin the materia!s to the re2uired departments.

Those stores section maintains some books !ike E

a. Transport.

b. %in card.

c. /ai!y issued.

d. @onth!y issued.

It is a!so one o" the section under Administration department& there are tota! o" ; emp!oyees

#orkin in this section.

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/AI76 3AG57A%URS

STR5 55?5R

+7ARST7 R@

+7AR

/I5S57 R@

+7AR

ATTAIN/5RS

ATTAIN/5RS

T7 R@

ATTAIN/5R+7ARS


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STORES ACCOUNT=

A"ter receivin the materia!s "rom supp!iers 2uantity #i!! be veri"ied. The detai!s o" the

materia!s #i!! be entered in to transport reistered and approved memo #i!! be sent to the

concerned departments "or ettin 2ua!ity approva!. They keep bin cards "or each di""erent items

receipt "rom the supp!iers #ith detai!s.

DIESEL BAN>=

They issue diese! to the party aainst indents brouht by the parties and issued is entered in

the dai!y issue reister.

TOOL ROO:=

Too! room is personne! issue the materia!s to the #orkers on temporary !oan and retainab!e

basis enterin in the reister.

Li*t (# t$e re/i*ter*=

1. Transport reister.

'. Approva! memo book.

,. %in card "i!es.

. ?urchase order.

I' *t(re t$ere are tF( *ecti('*

1( Transport entry tab!e.

'( Store receipt tab!e.

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1) Transport entry table:

They maintain records the receipt o" materia! at #hat data& at #hat time& vehic!e

number& *2uantity in k. Ackno#!edement "rom vehic!es etc.

2) Store receipt table

The store keeper maintain the record o" receipt o" materia!s& seria! no0s made o"

transport& purchase order re"erence& bi!! no0s the name o" the supp!ier etc. the store keeper has

iven proper condition to the materia! to identi"y the materia!s.

! :ANU6 ACTURING DEPART:ENT

@anu"acturin section is aain divided in to ' sub sections

7aboratory

Godo#n

LABORATORY=

7aboratory p!ays a sini"icant ro!e in suar production. The ey activity o" !aboratory is

checkin the content o" suar in the suar cone and "i)in the correct shape and si$e o" suar. The

!a prepared hour!y reports #hich advise on the addition o" other chemica!s in the production.

Ot$er c('cer'e% activitie* (# t$e +a!(rat(ry=

It determines the percentae o" #ater contents in the di!ution o" the juice.

It determines as #e!! as manain the temperature o" boi!in juice.

+hoices o" co!ors and si$e o" suar.

To manae time and 2ua!ity.

It decides the percentae and contents o" chemica!s to be added durin production.

It "inds the pF o" #ater throuh universa! indicator.

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Structure

6u'cti('

1( It takes care o" 2ua!ity o" suar juice.

'( It mi)es the chemica! as per re2uirement.

,( It e)amines the suar 2uantity.

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+hie" chemist

/epute chie"

+hemist

@anu"acturin

+hemist

7ab in chare

7ab boy Samp!e boy7ab chemist


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C$emica+* u*e% i' t$e -r(%ucti(' (# *u/ar7

%urnt-!ime b!eachin aent and pF contro!s juice c!ari"ication(

Su!phur major b!eachin aent.

rthophosphoric acid-b!eachin aent.

!occu!ent - settin aid.

+austic soda - c!earin.

+ommon sa!t- c!earin

3ashin soda - c!earin.

?hosphoric acid - settin.

Fydrous a pan b!eachin aent co!or (.

Hiscosity reducer- "or reducin viscosity

Ammonium bi"!ouride "orma!in-2ua!ity maintain and preservative.

@i!! sanitation chemica! to prevent eneration o" bacteria and increases the rate o"

boi!in.

@esopropi!e a!coho!.

+ommercia! F+7. %!eachin po#der Q "or c!eanin purpose.

!e acetate Q used "or !ab.

SUGAR=

It means somethin s#eet in "orm o" taste.

6OR:ULA=

+arbon dio)ide 3ater D sucrose o)yen

1'+' 11F''111''

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Ba!a*a!-ati+#ree--tm!a7c(m - ,B -

+AN5

I@%ITIN 3AT5R

@I77ING

%AGASS5

RA3 JUI+5

5LFAUST ST5A@ +N/5NSAT5 3AT5R

SU7?FUR/ILI/5S 7I@5

SU7?FUR5/ JUI+5

5LFAUST ST5A@ +N/5NSAT5 3AT5R

+75AR JUI+5

5LFAUST ST5A@ JUIS5 @U/

HA?URS +N/5NSAT5 3AT5R

S6RU?

SU7?FUR/ILI/5 GAS 5LFAUST ST5A@& HA?URS

HA?URS& +N/5NSAT5 3AT5R

@ASS+UIT5

ST5A@ R SU?5R F5AT5/ 3ASF 3AT5R INA7 @7ASS5S

SUGAR


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RA ;UICE= %e"ore sendin ra juice to process house it has to be #eihted in order to

e)cise the chemica! contro! and makin materia! ba!ance "or e""icient contro! o" the

process.

;UCE


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GODON SECTION=

Godo#n section is a!so one o" the important part o" the "actory. 3here the "inished suar is stored.

This "actory has 19 odo#ns> there are ' bi odo#ns its capacity ' !akhs bas and other 1,

odo#ns capacity ,:::: bas.

STRUCTURE=

9arietie* (# Su/ar ca'e=

1.++B;1 5ar!y @aturity

'.+C:11 @idd!e @aturity

,.+CB:,' 5ar!y @aturity

.+C:'1 5ar!y @aturity

9.+:1' 5ar!y @aturity

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Godo#n eeper

+!erks

Attender


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Civil section

Structure

1( ?!annin "or ne# project.

'( 3ater supp!y to the "actory * 2uarters.

,( 7ookin over c!ean!iness o" the "actory.

( @akin arranement "or the "unctions.

9( @aintenance o" "actory bui!din.


ASSISTANT

5NGIN55R

I+IA7 NN I+IA7

3R5R

F5A/ +7AR

+IHI7 5NGIN55R

3R5R


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B( @aintenance o" roads& #hich are constructed by "actory.

;( @aintainin disti!!ery p!ant.

IN6RASTRUCTURE SECTION

The in"rastructure is one o" the co-operative sectors in suar production& #hich is

!ocated in rannaaar& at timmapur vi!!ae and is 1B@ a#ay "rom @udho!. It is !ocated

near the bank o" Ghtaprabha River& so the "actory has obtained the premises "or !i"tin

3ater "rom this river "or "actory use.

T

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GENERAL OB;ECTI9ES O6 BUDGETARY CONTROL ARE AS 6OLLOS=

1 P+a''i'/=

A budet is a p!an o" the po!icy to be pursed durin the de"ined period o" timed to attain

a iven objectives. The budetary contro! #i!! "orce manaement at a!! !eve!s to p!an in time a!!the activities to be done durin the "uture periods.

A budeted as a p!an o" action achieves the "o!!o#in purposes.

Action is uided by #e!! thouht out p!an because a budet is prepared a"ter a care"u! study

and research.

The budet serves as a mechanism throuh #hich manaement0s objectives and po!ices are

a""ected.

It is bride throuh #hich communication is estab!ished.

The most pro"itab!e course o" p!an is se!ected.

%udet is a comp!ete "ormu!ation o" the po!icy o" the undertakin to be pursed "or the

purpose o" attainin a iven objectives.

7 C(3Or%i'ati('=

The common objectives o" the "irm may be success"u!!y achieved by the #ay o" budetary

contro! because it stimu!ates the co-operation o" a!! concerns #ith the co-ordinates the various

activities.

& C(mmu'icati('=

It is necessary in an e""icient orani$ation that a!! peop!e be in"ormed about the objectives&

po!ices& prorammers and per"ormance. This is made possib!e throuh their ?articipant in the

budetin process. %udets in"orm each manaer o" #hat others have areed to do. They a!so

in"orm manaers o" the resources avai!ab!e objects and tarets.Thus the budetin system interates key manaeria! "unctions as it !inks top manaement0s

p!annin "unction #ith the "unction per"ormed at a!! the !eve!s in the manaeria! hierarchy. %ut the

e""iciency o" the budet as a p!annin and contro! device depends upon the activity in #hich it is

bein used. A more accurate budet can be deve!op "or those activities #here direct re!ationship

bet#een inputs and outputs. The basis "or deve!opin budets and e)ercisin contro!.



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CONCEPT O6 BUDGETING=

ne o" the primary objects o" cost accountin is to provide in"ormation to business

manaement "or p!annin and contro!. %udetin act as a to!! o" both p!annin and contro!.

%udetin is a "orma! process o" "inancia! p!annin usin estimated and accountin data.

DE6INITION O6 T


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ESSENTIALS O6 BUDGET=

It is prepared in advance based on a "uture p!an o" action.

It re!ates to a "uture period and based on objective to be attained.

It is a statement e)pressed in monetary and "or physica! units prepared "or the

imp!ementation o" po!icy "ormu!ated by the manaement.



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CONTROL AND PER6OR:ANCE E9ALUATION=

%udetin entries into contro! at three pointsE

3hen a budeted is bein "ormu!ated& departments ana!y$e their p!ans "or the "uture and

submit estimates as per their re2uirements& justi"yin each o" their demands by demon

strin a need.

A"ter budets o" di""erent departments have been revie#ed and approved they become

tarets that set desirab!e !imits on spendin.

At the end o" the budet period& a comparison o" actua! e)penditure #ith budet

e)penditure is made as a means o" judin per"ormance and "i)in responsibi!ity "oe

deviations.

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AD9ANTAGES O6 BUDGETING=

%udetin p!ays an important ro!e in the e""ective use o" resources and achievin overa!!orani$ationa! oa!s.

%udetin compe!s and motivates manaement to make an ear!y and time!y study o" its

prob!em.

budetin provides a va!uab!e means o" contro!!in income and e)penditure o" a business

as it is a 4p!an "or spreadin8

%udetin provides a too throuh #hich manaeria! po!ices and oa!s are periodica!!y

eva!uated& tested and estab!ished as a uide!ines "or the entire orani$ation.

%udetin he!p in directin capita! and others resources into the most pro"itab!e channe!s.

%udetin coordinates and corre!ates a!! business activates.

The use o" budetin in an orani$ation deve!ops an attitude o" 4+ost +onsciousness8&

stimu!ates the e""ective use o" resources& and creates an environment o" pro"it-mindedness

throuhout the orani$ation.

4The uppermost point is that budets provide a discip!ine that brins p!annin to the

"ore "ront as a key manaeria! responsibi!ity8.

%udetin encourae productive competition.



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CLASSI6ICATION O6 BUDGETS=

A7 Acc(r%i'/ t( time=

7on term budetsE A budet is desined "or a period o" 9 to 1:yrs.

Short term budetsE A budet is a enera!!y prepared "or a period o" Not e)ceedin 9

years

+urrent %udetsE The budeted is prepared "or a month or a 2uarter.

B7 Acc(r%i'/ t( #+exi!i+ity

i)ed budetE A budet prepared on the basis o" "i)ed or a standard !eve! o" activity. It

does not chane #ith respect to !eve! o" activity.

!e)ib!e budetE A budet is prepared depend upon the !eve! o" the

Activity.

OPERATING AND 6UNCTIONAL BUDGETS=

1 Sa+e* !u%/et=

The most important budet& #hich a!! other budets are continent upon& is the sa!es

budet. A!! budets& such as production budet& se!!in * distribution budet * other a!! a""ected

by the sa!es budeted * are depended upon the revenue derived "rom sa!es.

6(reca*ti'/ *a+e*=

The three main "actors that shou!d be considered by manaement in "orecastin sa!es.

1( In"ormation concernin past per"ormance.

'( In"ormation about present condition #ith in the individua! company * in each sa!es territory.

,( /ata concernin the industry * enera!!y business.

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Pr(%ucti(' !u%/et=

A production budet is stated in physica! units. 5ssentia!!y the production budet is the

sa!es budet adjusted "or inventory chanes as "o!!o#s.

Units producedD %udeted Sa!es /esired +!osin Inventory o" inished Goods-%einnin

Inventory o" inished Goods.(

& Pr(%ucti(' c(*t !u%/et=

A production cost budeted summaries the materia!s budet& !ab our budeted& the "actory

budet& and may be e)pressed and ana!y$ed by departments and or products. It is a!so kno#n as

manu"acturin budet.

) Direct materia+ !u%/et=

This budet speci"ies the cost i" direct materia!s used and the +ost o" the direct materia!s

purchased.

Use o" direct materia! budet

1. It he!ps the purchasin departments to prepare a schedu!e to ensure

/e!ivery o" materia! #hen needed.

'. It he!ps in "i)in minimum and ma)imum !eve!s o" inventories in stores

department.

,7 Direct +a!(r !u%/et=

The !abor budet estimates the !abor& ade2uate in number and rades& to enab!e the

production budet to be achieved. It is enera!!y pre"erab!e to prepare a separate direct !abor

budet and to inc!ude indirect !abor in the "actory over head budet.

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.7 6act(ry (ver$ea% !u%/et=

This budet is prepared on the basis o" chart o" accounts #hich re"!ects di""erent e)penses

accounts * #hich proper!y c!assi"ied e)penses accounts and detai!s the cost centers or departments

"actory overhead budeted #here in overhead costs have been c!assi"ied in to "i)ed and variab!e

components.

i7 I've't(ry !u%/et=

An inventory budet can be prepared to "ind out the va!ues o" direct materia!s * "inished

oods inventory.

a7 Se++i'/ ex-e'*e* !u%/et=

It is a!so kno#n as the marketin e)penses budet. The se!!in cost budet is made up o" a

number o" cost items& some o" #hich are "i)ed and some variab!e. i)ed e)penses are sa!aries and

depreciation> the principa! variab!e e)penses are commission& trave! advertisin and bad debts.

!7 A%mi'i*trative ex-e'*e* !u%/et

The Administrative e)penses budet covers the administrative costs "or non-

manu"acturin business activates. The administrative e)penses budets contains e)penses !ike

director0s remunerations& !ea! chares& audit "ees& sa!aries& rent o""ice e)penses& interest& property

ta)& put etc.

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BUDGETED INCO:E STATE:ENT

A budeted income statement summaries a!! the individua! %udets i.e. sa!es budeted& cost

o" the oods so!d budet& se!!in budet& and administrative e)penses budet. This budet

determines income be"ore ta)es I" the ta) rate is avai!ab!e& net income a"ter ta)es can a!so be

computed(.A system o" budetary contro! insta!!ation in an orani$ation is very much bene"icia!

#hich may be resu!t in proper p!annin * contro! o" activates. It u!timate!y resu!ts in minimi$in

costs and ma)imi$in pro"its.

I" the company #ants to prepare the budets "or "uture period o" time& it is very much essentia!

that company have to consider the past per"ormance. Thus the past per"ormance is treated as vita!

basis "or the "uture period. Suppose in case o" past per"ormance is not avai!ab!e than the company

has to "o!!o# the "o!!o#in process.

A7 DETER:INATION O6 T


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SO:E I:PORTANT :ATTERS CO9ERED IN A BUDGET :ANUAL

A statement re!ated to objectives o" the orani$ation * ho# they can be achieved

throuh budetary contro!.

Reports& statements& "orms * other records to be maintained.

Timetab!es "or a!! staes o" budetin.

A statement re!ated to "unctions and responsibi!ities o" each e)ecutive.

There shou!d be proper c!assi"ication o" accounts& #hich are !ost& revenues and other

"inancia! amounts are to be c!assi"ied #ith their respective nature.

D7 REPONSIBILITY 6OR BUDGETING=

1. %udet contro!!erEThe chie" e)ecutive is u!timate!y responsib!e "or the budet proram

and past o" #ork desinated as budet contro!!er. The budet contro!!er shou!d have

kno#!ede o" technica! ski!! o" the business and report to chie" e)ecutive.

'. %udet committeeE %udet committers are "ramed "or true de!eation o" authority and

responsibi!ities. The #ork shou!d be divided under di""erent heads i.e. Sa!es& production&and "inance etc. The duty o" budet committee to submit& discuss and "ina!!y approve o" the

budeted bi "iures.

E7 6I8ATION O6 T


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67 BUDGETED PROCEDURE=

The procedure "o!!o#ed #hi!e desinin and operatin a budetary contro! system depends

upon the nature o" the business.

T


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,7 C$(ice !etFee' 6ixe% 6+exi!+e !u%/et*=

A "i)ed budet is based on a "i)ed vo!ume o" activity. It is ine""ective * meanin!ess

because o" actua! capacity uti!i$ation may vary "rom month to month or 2uarter to 2uarter.A "!e)ib!e budet is prepared "or chanin !eve!s o" activity. The "!e)ib!e budet considers

the "i)ed and the variab!e costs separate!y.

1. Start #ith a canned budet #orksheet.

'. Go throuh your check book or bi!!s "or the !ast t#o to three months and add and de!ete

cateories "rom the #orksheet to "it your e)penditures.

,. Think about your hobbies and your habits and be sure to add cateories "or these e)penses.

. Go throuh your pay stubs and ca!cu!ate your averae month!y ross pay.

9. /o the same "or any interest income& dividends& bonuses& or other misce!!aneous income.

B. or each e)pense cateory& try to determine a budet amount that rea!istica!!y re"!ects your

actua! e)penses #hi!e settin tareted spendin !eve!s that #i!! enab!e you to save money.

;. nce youre com"ortab!e #ith your e)pense cateories and budeted amounts& enter

e)penditures "rom your checkbook "rom the !ast month.

C. eep track o" cash e)penditures throuhout the month and tota! and cateori$e these at the end

o" each month.

. Subtota! the income and e)pense cateories.

1:. Subtract the tota! e)penses "rom the tota! income to arrive at your net income.

11. I" the number is neative& your e)penses are reater than your income. 6our situation can

probab!y be reat!y improved by chanin your spendin habits.

1'. I" you have a positive net income& trans"er most o" it to a savins or investment account at the

end o" each month. 5)tra cash !e"t in a reu!ar checkin account has a #ay o" ettin spent.

1,. A"ter youve tracked your actua! spendin "or a month or t#o& ana!y$e your spendin to

identi"y #here you can com"ortab!y make cuts.

1. nce youve ot the budetin process in p!ace& take an in-depth !ook at your !arest spendin

cateories& brainstorm about #ays to reduce spendin in speci"ic cateories& and set rea!istic

oa!s

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Ti-*=

1. /ont try to "it your e)penses into somebody e!ses budet cateories. Tai!or the cateories

to "it your o#n situation.

'. @ake your cateories detai!ed enouh to provide use"u! in"ormation& but not so detai!ed

that you become boed do#n in trivia! detai!s.

,. Think o" your budet as a too! to he!p you et out o" debt and save money& not as a

"inancia! diet.

NEED 6OR T


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DATA ANALYSIS

AND

INTERPETATION



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CO:PARISION O6 PRE9IOUS BUDGETED 6IGURES IT

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103867784 a Project Report on Budgetary Control at Ranna Sugars 2111

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