NORTH SOUTH UNIVERSITY

Accounting
202

5
 MASTER BUDGET
OF
“ARIF TEA STALL”
SUBMITTED TO : SHEIKH MOHAMMAD RABBY
LECTURER OF ACCOUNTING AND FINANCE
NORTH SOUTH UNIVERSITY
DATE OF SUBMISSION :07/12/2015
GROUP MEMBERS :
1. ZULHAS UDDIN ZEWEL (1511230030)
 2. Letter of Transmittal
06TH DECEMBER, 2015
SHEIKH MOHAMMAD RABBY
Lecturer
ACCOUNTING AND FINANCE DEPARTMENT,
North South University
Subject: Submission of Group Project Report on MASTER BUDGET ON “ARIF TEA STALL”

Dear Sir,
With great pleasure we are submitting the group project on Master Budget of “arif tea stall”.
This project has been an eye-opener for us. We have found the project quite interesting,
beneficial and knowledgeable. We have tried our level best to complete and prepare effective
and creditable project report. It is a good opportunity for all of us to gain some practical
knowledge and innovative ideas about how to make a master budget. This would help us in
future to make more effective master budget.

We would like to thank you for your support and we appreciate the opportunity to work on this
project. We believe that this report would be interesting to you. We hope that our unwanted
errors will be taken with forgiveness.

Yours Sincerely

Md. Zulhas Uddin Zewel (151 1230 030)

We want to prepare the master budget of a tea stall.. We have prepared this
feasibility budget on that basis. We have assigned a name for the budget is
“MASTER BUDGET OF ARIF TEA STALL”.

We have prepared a financial documentation for this feasibility of the Mater

Budget. As we are preparing the budget, we have to find all the information like
sales, expected cash disbursement, cash collection, raw materials, selling and
administration cost, manufacturing overhead. Then we have to find income
statement and balance sheet. We have prepared the master budget for the next
financial year of 2016. After researching the master budget we can tell you the
exact loss and profit. Actually all the values are in estimated form. So we will get
the estimated profit or loss. The value can be more or less. It depends on the value
of sales and all the materials needed for budgeting.
 INTRODUCTION
Business is a commercial activity by which a person can earn his livelihood to
continue his best form of standard of living. Every business comprises of profit and
loss. As an enterprenuer, I want to start a new business which is similar to
propreitorship. I found the idea of starting the business watching the small business
(tea stall) run by Arif mama.In the past, he used to sell tea outside the North South
University. Now he has a small shop by which he can earn a little profit. He is a
proprietor. He runs his own business and he has a helper who helps him in his
work. He consumes his own profit as well as bears all loss. He may have to run the
business very carefully. There are rarely a lot of people who do not drink tea. So its
very profitable business. That is why I want to run business like him. After that I
collected all information to put that value in the muster budget schedule to get the
value of the profit and loss.
 BACKGROUND
The owner of the tea stall is Mr. Arif Hossain. He started his business by selling
tea outside NSU and IUB. He came to Dhaka in 2012 and firstly he had no work to
do. Then he decided to do a small work. Then he started selling tea in numerous
places other than nsu and iub. When he earned a reasonable profit, he started to
think of giving a small shop anywhere in Dhaka. Then he rented a small shop.
Previously he did not have any popularity. Now he is a popular tea staller among
people. His tea is very special because of his way and taste of making tea.
According to my opinion, his tea is very special and steal the mind of people
through the tea. Those who once tasted his tea , he / she will definitely come to his
shop again.

NATURE OF THE BUSINESS

The nature of the business of a tea stall is just like the proprietorship. In
proprietorship, he has to bear all the loss and get all the profit.

PRIMARY PRODUCT
The primary product of the tea stall is tea. Previously, he used to sell cigarate but
according to him, when he saw his son smoking, he left selling those smoking
materials. Besides tea, he sells the bread, banana and some other food materials.
 LOCATION
The location of the place is in vatara just beside the Apollo Hospital. It is just a
very small shop. Previously there was no electricity connection but now the
electricity comes in his shop.
 INFORMATION &CALCULATION FOR BUDGET
1) SALES : all are estimated value taken from the interview of MR.
Arif.
QUARTER 1(JAN-MAR): 2600+2780+2500=7880CUP
QUARTER 2(APR-JUN): 2250+2400+2700=7350CUP
QUARTER 3(JUL-SEP): 2400+2350+2860= 7610CUP
QUARTER 4(OCT-DEC):1900+2740+2500= 7140CUP
#THE SELLING PRICE PER CUP IS 06 TK PER CUP
SALES

NAME QUARTE QUARTER QUARTE QUARTE YEARLY

R 2 R R
1 3 4
SALES 7880 7350 7610 7140 29980

PER *6 *6 *6 *6 *6
CUP
PRICE

TOTAL 47280 44100 45660 42840 179880

 2) EXPECTED CASH COLLECTION :
90% COLLECTED IN THE MONTH SALE
10% COLLECTED IN THE NEXT MONTH
TK 4000 ESTIMATED REMAINS ACCOUNT RECEIVEABLE AT
DEC. 2015

CASH COLLECTION

ELEMENT QUARTER QUARTER QUARTER QUARTER A/R YEAR

1 2 3 4 FOR
NEXT
YEAR
DECEMBER 4000 4000
2015
RECEIVEABL
E
90%*47280 42552 42552+
10%*47280 4728 4728

90%*44100 39690 39690+

10%*44100 4410 4410

90%*45660 41094 41094+

10%*45660 4566 4566

90%*42840 38556 38520

10%*42840 4284

TOTAL 46552 44418 45504 43122 179596

3)THE PRODUCTION BUDGET :

MR. ARIF WANTS 2% ENDING INVENTORYTO BE EQUAL TO
THE NEXT MONTHS BUDGETED SALES.
2017 1ST QUARTER ESTIMATED SALES MAY BE OF 6500 CUP
PRODUCTION BUDGET

ELEMENTS QUARTER QUARTER2 QUARTER QUARTER YEARLY

1 3 4

BUDGETED 7880 7350 7610 7140 29980

SALES

(+)ENDING 2%*7350 2%*7610 2%*7140 2%*6500 1300

INVENTORY =1470 =1522 =1428 =1300

(-) 1470 1522 1428

BEGINNING 0 0

REQUIRED 9350 7402 7516 7012 31280

PRODUCTION
 4)DIRECT MATERIAL BUDGET :
TEA LEAF+MILK+SUGAR+COFFE+ORANGE FOR ORANGE
TEA=MATERIALS
FOR 1 KILO OF MATERIALS, WE CAN MAKE 250 CUPS OF TEA.
SO 1 CUP CONTAINS 1000/250=4 gm OF TEA MATERIALS.
HE WANTS AT LEAST 5% OF MATERIALS ON HAND AT THE
END OF EACHMONTH EQUAL TO THE NEXT MONTH
PRODUCTION.
ON DECEMBER 31,HE MAY HAVE 1200gm OF MATERIALS.
MATERIAL BUDGET

MATERIAL COST TK 3 PER CUP TEA.

ELEMENTS QUARTER1 QUARTER2 QUARTER3 QUARTER YEAR
4
END

PRODUCTIO 9350 7402 7516 7012 31280

N
BUDGET
PER CUP *4 *4 *4 *4 *4
GRAM
MATERIALS
PRODUCTIO 37400 29608 30064 28048 12512
N NEEDS 0
(+)ENDING 5%*2960 5%*3006 5%*2804 5%*6400 1280
8 4 8 =1280
=1480.4 =1503.2 =1402.4
(-)BEG. 1200 1480.4 1503.2 1402.4 1200
PURCHASE 37680.4 29630.8 29963.2 27925.6 12520
0
5) CASH DISBURSEMENT :
HE PAYS TK 3 PER GRAM OF MATERIAL
50% GIVEN ON THE MONTH OF PURCCHASE AND OTHER 80%
IN THE NEXT MONTH.
IN DECEMBER 2015 ESTIMATED PAYABLE MAY BE TK 2500
ELEME QUART QUART QUART QUART A/P YEAR
ER 1 ER2 ER3 ER4
NT OR
NEXT
YEAR
PURCH 37680. 29630. 29963. 27925. 12520
ASE 4 8 2 6 0
PER *3 *3 *3 *3 *3
CUP
PRICE
3TK
COST 11304 88892. 89889. 83776. 37560
1.2 4 6 8 0
. 90432. 22608.
8*11304 96 24
1.2 (20%)
. 71113. 17778.
8*88892. 92 48
4 (20%)
. 71911. 17977.
8*89889. 68 92
6 (20%)
. 67021. 16755.
8*83776. 44 36
8
A/P 2500
DEC.15
TOTAL 92932. 93722. 84799. 84999. 27205
96 16 92 36 4.4

6)DIRECT LABOUR BUDGET :

PER 13 HOUR TK 300
DPAILY WORKING HOUR 13 HOURS
PER HOUR 300/13= 23

ELEMENT QUARTER QUARTER QUARTER QUARTER YEAR

1 2 3 4

PRODUCTIO 9350 7402 7516 7012 31280

N

LABOUR 13 13 13 13 13
HOUR

LH PER FOR 9350/13 7402/13 7516/13 7012/13 2406.15

ALL TEA =719.30 =569.38 =578.15 =539.38

*WAGE 23 23 23 23 23
RATE
TOTAL COST 16543.9 13095.7 13297.4 12405.7 55341.4
4 5 4 5
7) MANUFACTURING OVERHEAD :
VARIABLE MOH :
ELECTRICITY BILL : 1800 TK PER QUARTER
WATER BILL(FILTERED) : 800 TK PER QUARTER
PER YEAR VARIABLE MOH WILL BE = 1800+800 =2600*4(4
QUARTER) =10400

FIXED MOH COST :

RENT :6000.
GAS BILL : 1950
TOTAL FMOH : (6000+1950)=7950*4=31800
TOTAL OVERHEAD COST : 31800+10400=42200
PER QUARTER : 42200/4 =10550.
NON CASH DISBURSEMENT : 3000
#10550-3000=7550(M0H)
8)SELLING AND ADMINISTRATIVE COST :

HELPERS SALARY :
MONTHLY 2000
SO YEARLY =(2000*12)=24000
PER QUARTER TK 6000
9)CASH BUDGET:
DECEMBER 31 CASH BALANCE 60000
ELEMENT QUARTER QUARTER QUARTER QUARTER4 YEAR
1 2 3
CASH 60000 38777.7 26919.1 65612.51 60000
6
(+)CASH 46552 44418 45504 43122 179596
COLLETION
CASH 106552 83195.7 72423.1 108734.5 239596
AVAILABLE 6 1
LESS :
MATERIAL 37680.4 29630.8 29963.2 27925.6 125200
DL 16543.9 13095.7 13297.4 12405.74 55341.4
4 5 5
MOH 7550 7550 7550 7550 30200
S&A 6000 6000 6000 6000 24000
EXPENSE
CASH 38777.7 26919.1 15612.5 54853.17
BALANCE 6 1
BORROWING 50000
S
TOTAL 65612.5
1
INTEREST (2000) 2000
EXPENSE 4%
LOAN PAID (50000)

ENDING 2853.17 2854

CASH
BALANCE
 INCOME STATEMENT
SALES(29980*6) 179880
(-)COST OF GOODS SOLD 125200
GROSS MARGIN 54680
(-)SELLING AND ADMIN COST 6000
OPERATING INCOME 48680
(-)INTEREST EXPENSE 2000
NET INCOME 46680
 BALANCE SHEET
EQUITY :8902.38
ASSET:
CASH 2854
ACCOUNTS RECEIVEABLE 4284
RAW MATERIALS 125200
TOTAL ASSET 132338

LIABILITIES :
ACCOUNTS PAYABLE 16755.36
Retained earnings (60000+46680) 106680
EQUITY 8902.64
TOTAL 132338
ASSET = LIABILITIES + OWNER’S EQUITY
REFERENCE :
1)WHOLE INFORMATION TAKEN FROM MR ARIF HOSSAIN,
OWNER OF THE TEALL STALL
2)ALL HELPS TAKEN FROM THE CLASS LECTURE
3) PRINCIPLES OF MANEGERIAL ACCOUNTING (GARISON)