TAWAKKAL OIL MILL

Tawakkal Oil Mill is situated in Site Area Sukkur. It has been in existence for last
20 years. Since the day first it processes rapeseed known as in local language as
‘sarsoon’.
Sukkur is the main market for rapeseed oil in Pakistan, the price of oil is set in
this market and applied to whole Pakistan. This is because the farming of
rapeseed is done on biggest scale in this region. Nawabshah, Jhuddu, Naushahro
Feroze and kashmore are some of the prominent areas. Huge amount of output
of rapeseed enables this region to dominate and supply to entire country. Still,
there is a supply gap which reinforces to import from other countries.
When Rapeseed is processed it has 2 outputs: rapeseed oil and rapeseed cake.
Rapeseed oil is mainly used in ghee and cooking oil. While Rapeseed cake is used
by plants to make animal feed or it is also directly used for animal eating. In this
industry the product is considered in terms of 40kg, price and quantity is also
set in this 40kg.

(100%) 40 KG of Rapeseed
(33.75%)13.5KG Oil (63.75%)25.5KG Cake (2.5%)1KG waste

PRODUCTION BUDGET
A production budget is a financial plan that lists the number of units to be
manufactured during a period. In other words, this is a report that estimates the
number of units that a plant will produce from period to period. This is made on
monthly basis in this case. Ending inventory oil is kept as 5% of total expected
sales of next month.
 SALES BUDGET
A sales budget is a financial plan depicting how resources should best be
allocated to achieve the forecasted sales. The purpose of sales budgeting is to
plan for and control the expenditure of resources (money, material, people and
facilities) necessary to achieve the desired sales objectives.

Direct Material Budget

Direct Labor Budget

The direct labor budget is used to calculate the number of labor hours that will be needed to produce
the units itemized in the production budget. There are 8 hours shift that means 3 shifts of labor in
a day. And in each shift there are 8 workers.

Manufacturing Overhead Budget

The manufacturing overhead budget contains all manufacturing costs other than the costs of direct
materials and direct labor (which are itemized separately in the direct materials budget and the
direct labor budget).

Details: variable overheads

Manufacturing Overhead Budget

Jan-16
Contribution
income
statement
Jan Feb March April May June July August September
sales 71606250 73575000 75543750 75993750 75009375 75037500 76500000 77388750 78277500
COGS 68250000 67500000 67500000 69000000 70500000 71250000 72000000 72600000 73500000
Variable
expenses 1666950 1666950 1666950 1666950 1666950 1666950 1666950 1666950 1666950
Contribution
margin 1689300 4408050 6376800 5326800 2842425 2120550 2833050 3121800 3110550
Fixed
expenses 510000 510000 510000 510000 510000 510000 510000 510000 510000
Net
operating
income 1179300 3898050 5866800 4816800 2332425 1610550 2323050 2611800 2600550
 Jan Feb March April May June July August September
rapeseed
price 2275 2250 2250 2300 2350 2375 2400 2420 2450

Sales
budgeted
Marc Augu Septe Octo Nove Dece
Jan Feb h April May June July st mber ber mber mber

Budg
eted
sales 4050 4050 4050 4050 4050 4050 4050 4050 40500 4050 40500 40500
oil 00 00 00 00 00 00 00 00 0 00 0 0
sellin
g
price 4900 5000 5100 5050 5000 5050 5100 5150 5200 5250 5300 5250
Budg
eted
sales 7650 7650 7650 7650 7650 7650 7650 7650 76500 7650 76500 76500
cake 00 00 00 00 00 00 00 00 0 00 0 0
sellin
g
price
per
cake 1150 1200 1250 1300 1275 1250 1300 1320 1340 1360 1380 1350
Total 7160 7357 7554 7599 7500 7503 7650 7738 78277 7916 80055 78975
sales 6250 5000 3750 3750 9375 7500 0000 8750 500 6250 000 000

Production budget in quantity ( kgs )

Sept Oct Nov Dece
Mar Apri Ma Jun Aug emb obe emb mbe
Jan Feb ch l y e July ust er r er r
120 120 120 120 120 120 120 120 120
000 000 000 000 000 000 000 000 1200 000 1200 1200
Rapeseed 0 0 0 0 0 0 0 0 000 0 000 000
 Budgeted sales 405 405 405 405 405 405 405 405 4050 405 4050 4050
oil 000 000 000 000 000 000 000 000 00 000 00 00
Budgeted sales 765 765 765 765 765 765 765 765 7650 765 7650 7650
cake 000 000 000 000 000 000 000 000 00 000 00 00

Direc
t
mate
rial
budg
et
Marc Augu Septe Octo Nove Dece
Jan Feb h April May June July st mber ber mber mber
Raw
materials
to be 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200
purchased 000 000 000 000 000 000 000 000 000 000 000 000
cost of
raw
material 2275 2250 2250 2300 2350 2375 2400 2420 2450 2500 2500 2450
cost of
raw
material
to be 6825 6750 6750 6900 7050 7125 7200 7260 7350 7500 7500 7350
purchased 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000 0000

Manufacturing overhead Budget

Oct
Mar Apri Aug Septe obe Nove Dece
Jan Feb ch l May June July ust mber r mber mber
Pre-process 105 105 105 105 105 105 105 105 1050 105 1050 1050
Rs.7 /80 Kg 000 000 000 000 000 000 000 000 00 000 00 00
8 hour shift, 8
workers each, 151 151 151 151 151 151 151 151 1512 151 1512 1512
210 wage 200 200 200 200 200 200 200 200 00 200 00 00
Electricity 135 135 135 135 135 135 135 135 135
Expense 3 units/ 000 000 000 000 000 000 000 000 1350 000 1350 1350
40 Kg 0 0 0 0 0 0 0 0 000 0 000 000
Cake
loadding 382 382 382 382 382 382 382 382 3825 382 3825 3825
Rs.3 /60 Kg 50 50 50 50 50 50 50 50 0 50 0 0
Rapeseed
unloading 1.5/ 225 225 225 225 225 225 225 225 2250 225 2250 2250
80 Kg 00 00 00 00 00 00 00 00 0 00 0 0
total 166 166 166 166 166 166 166 166 166
variable 695 695 695 695 695 695 695 695 1666 695 1666 1666
expense 0 0 0 0 0 0 0 0 950 0 950 950
/
4
0
VO K 55.5 55.5 55.5 55.5 55.5 55.5 55.5 55.5 55.56 55.5 55.5 55.5
H g 65 65 65 65 65 65 65 65 5 65 65 65

Fixe
d
Elecrtric 900 900 900 900 900 900 900 900 9000 900 9000 9000
ity 00 00 00 00 00 00 00 00 0 00 0 0
Sala 150 150 150 150 150 150 150 150 1500 150 1500 1500
ries 000 000 000 000 000 000 000 000 00 000 00 00
Repair And
Maintenanc 150 150 150 150 150 150 150 150 1500 150 1500 1500
e 000 000 000 000 000 000 000 000 00 000 00 00
oth 120 120 120 120 120 120 120 120 1200 120 1200 1200
ers 000 000 000 000 000 000 000 000 00 000 00 00
FO 510 510 510 510 510 510 510 510 5100 510 5100 5100
H 000 000 000 000 000 000 000 000 00 000 00 00

Total 217 217 217 217 217 217 217 217 217
overhea 695 695 695 695 695 695 695 695 2176 695 2176 2176
d 0 0 0 0 0 0 0 0 950 0 950 950

Flexible Budget
MARCH
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2250
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.25
Overhead Repair and Maintenance F 150000 0

Total 390000 2511.25

 JULY
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2400
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.25
Overhead Repair and Maintenance F 150000 0

Total 390000 2661.25

APRIL
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2300
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.25
Repair and
Overhead Maintenance F 150000 0

Total 390000 2561.25

AUGUST
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2420
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.25
Repair and
Overhead Maintenance F 150000 0

Total 390000 2681.25

 SEPTEMBER
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2450
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.35
Overhead Repair and Maintenance F 150000 0

Total 390000 2711.35

NOVEMBER
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2500
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 7.25
Overhead Repair and Maintenance F 150000 0

Total 390000 2762.25

OCTOBER
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2500
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 6.45
Overhead Repair and Maintenance F 150000 0

Total 390000 2761.45

 DECEMBER
FLEXIBLE BUDGET
Cost Fixed Variable
Expenses behaviour amount amount
DM V 0 2450
DL V 0 210
Salaries F 150000 0
Utility SV 90000 45
Indirect
labor V 0 7.25
Overhead Repair and Maintenance F 150000 0

Total 390000 2712.25

Exponential Smoothing
OIL
Alpha 0.1
Forecasting
Actual (0.1) MADs(0.1) MSE(0.1) MA%E(0.1)

Jan 4900 5113 213.00 45369 4.35%

Feb 5000 5,091.70 91.70 8408.89 1.83%

March 5100 5,082.53 17.47 305.2009 0.34%

April 5050 5,084.28 34.28 1174.912729 0.68%

May 5000 5,080.85 80.85 6536.60931 1.62%

June 5050 5,072.76 22.76 518.2165415 0.45%

July 5100 5,070.49 29.51 870.9620986 0.58%

Aug 5150 5,073.44 76.56 5861.56533 1.49%

sep 5200 5,081.10 118.90 14138.34534 2.29%

oct 5250 5,092.99 157.01 24653.48941 2.99%

nov 5300 5,108.69 191.31 36600.61314 3.61%

dec 5250 5,127.82 122.18 14928.3386 2.33%

SUM 1,155.55 159,366.14 22.55%

 AVERAGE 96.30 13,280.51 0.02

Smoothing MA
get rid of
Yt BaseLine Yt/Trend
Irregularity
Seasonality
X Smoothing and Seasonality
Irregularity
Material
t Year Quarter MA(4) CMA(4) It*St St
Price
1 1 2275 T 0.998859596
2 2 2250 2268.75 1.006607616
Year 1
3 3 2250 2287.5 2278.125 0.987654321 0.667770311
4 4 2300 2318.75 2303.125 0.998643148 0.99468186
5 1 2350 2356.25 2337.5 1.005347594 0.998859596
6 2 2375 2386.25 2371.25 1.001581444 1.006607616
Year 2
7 3 2400 2411.25 2398.75 1.000521105 0.667770311
8 4 2420 2442.5 2426.875 0.997167139 0.99468186
9 1 2450 2467.5 2455 0.99796334 0.998859596
10 2 2500 2475 2471.25 1.011633789 1.006607616
Year 3
11 3 2500 2483.333333 2479.166667 1.008403361 0.667770311
12 4 2450 2475 2479.166667 0.988235294 0.99468186
13 1 2450 2462.5 0 0.998859596
14 2 1.006607616
Year 4
15 3 0.667770311
16 4 0.99468186
17 1 0.998859596
18 2 1.006607616
19 3 0.667770311
20 4 0.99468186