Report on Master Budget ACT202

Of North End Coffee Roasters

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 North South University

Summer 2019

ACT202
Section: 03

Master Budget of
North End Coffee Roasters

Submitted to:
Ms. Rubaiya Nadia Huda
Lecturer
Department of Accounting & Finance

Prepared and Submitted by:

Names Ids
Abu Horaira Kamal 1330504630
Tashkin Wadud 1711565630
Soria Zoon Haider 1812017630

Submitted on:
September 2, 2019

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Table of Contents

Content Page No.

Letter of Submission 4

Acknowledgement 5

Executive Summary 6

Master Budget 7-8

Forecasted Income Statement 8

Forecasted Balance Sheet 9

References 9

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September 2, 2019

Ms. Rubaiya Nadia Huda

Lecturer
Department of Accounting & Finance,
School of Business and Economics,
North South University.

Subject: Submission of the Report on Master Budget on North End Coffee Roasters

Dear Madam,

We state that we would like to submit our report on Master Budget of North End Coffee Roasters
as per your instruction. In this report, we have presented a detailed master budget on North End
Coffee Roaster’s product- Chocolate Chip Cookie. It was an interesting opportunity for us to visit
the store and understand a real-life implication of Managerial Accounting. We have tried to
scrutinize the details and prepare a perfect forecasted report for the product.

Therefore, we hope that you would be kind enough to accept this report and oblige thereby.

Sincerely yours

Abu Horaira Kamal

Tashkin Wadud

Soria Zoon Haider

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Acknowledgement
To begin with, we would like to express our deep gratitude and sincere thanks to Almighty Allah
for providing us the sufficient strength to complete this project successfully.

We would like to demonstrate our humble gratefulness to Ms. Rubaiya Nadia Huda, our course
instructor to ACT202 since she has guided us from the beginning to the end of the project. We
have found this project truly educative. We hope that the lessons we have received from this project
will be helpful for our future endeavors.

We wish to express our gratitude to Mr. Jahir Sheikh, manager of the store. He has spent his
precious time for us. Likewise, he has been kind enough to provide us all the necessary information
we need for the project of Master Budget. In addition, he has given a visiting card of his so that
we can use that as an evidence of the interview.

We acknowledge the contribution of each of the members of this group. All of them have put a lot
of effort in this project to make this project successful. Their spirit in this work has been
remarkable. Without such willingness of them, this project would not be complete.

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Executive Summary

North End Coffee Roasters is a single source for fresh-roasted coffee in Bangladesh. “North
End” alludes to both to their location in the North part of Dhaka and their roots in the famous
Italian-American “North End” of Boston.

Begun in 2011, they offer both premium quality single-origin coffees from around the world and
locally-grown blends. Their emphasis is quality roasting, drawing from years of experience in
the industry. North End also partners with other community organizations in developing coffee
and pastry services.

This project is aimed at understanding how all the fundamentals of managerial accounting
applies on actual companies in the real world. For this we went to the North End's branch at
Apollo Hospitals Ltd in Bashundhara. We asked all the necessary questions about North End's
costing/budgeting system and were able to get answers for most, if not all, of our questions.

To gather all the needed pieces of information we had interviewed some officials, including the
manager of the store about some questions we had in our mind. We had prepared a detailed
questionnaire on their production process of ‘Chocolate Chip Cookie’ which is a famous product
of the store. The questions covered most of the basics we needed for this report. We were able to
collect some other information by doing some research from their website and other sources. The
times we weren’t able to get any information, we had given our own speculations to what the
answers might be.

At the end of the report, we were able to understand how a master budget can be prepared and
how it helps to determine forecasted income statement and balance sheet pertaining to a
particular product.

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Master Budget

North End Coffee Roasters (Apollo Hospital branch)

Master Budget for CHOCOLATE CHIP COOKIE for 2019-2020
(July 1, 2019-June 30, 2020)
1st 2nd 3rd 4th
Quarters Total
Quarter Quarter Quarter Quarter
Sales Budget
Budgeted Sales (units) 5000 5500 6500 7000 24000
Selling Price/Unit 100 100 100 100 100
Total Sales 500000 550000 650000 700000 2400000

Production Budget
Budgeted Sales 5000 5500 6500 7000 24000
Add: Desired Inventory 0 0 0 0 0
Less: Opening Inventory 0 0 0 0 0
Required Production 5000 5500 6500 7000 24000

Direct Material Budget

Budgeted Production 5000 5500 6500 7000 24000
DM cost/unit 28 28 28 28 28
Budgeted DM Cost 140000 154000 182000 196000 672000

Direct Labor Budget

Budgeted Production 5000 5500 6500 7000 24000
Direct Labor Hours/Unit 0.1 0.1 0.1 0.1 0.1
Total Direct Labor Hours 500 550 650 700 2400
Wage rate/Direct labor hours 90 90 90 90 90
Budgeted Direct Labor Cost 45000 49500 58500 63000 216000

Manufacturing Overhead Budget

Budgeted Direct Labor Hour 500 550 650 700 2400
Variable MOH Rate 7 7 7 7 7
Variable MOH Cost 3500 3850 4550 4900 16800
Fixed MOH Cost 28000 28000 28000 28000 112000
Total MOH Cost 31500 31850 32550 32900 128800
Less: Depreciation 7000 7000 7000 7000 28000
Cash Disbursements for MOH 24500 24850 25550 25900 100800

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Selling & Administration Budget
Budgeted Sales 5000 5500 6500 7000 24000
Variable S&A expense/unit 8 8 8 8 8
Budgeted variable S&A expense 40000 44000 52000 56000 192000
Fixed S&A expenes 60000 60000 60000 60000 240000
Total Budgeted S&A expenses 100000 104000 112000 116000 432000

Cash Budget
Opening Cash budget 60000 250500 468150 740100 1039200
Add: Cash Receipts:
Collection from Customers 500000 550000 650000 700000 2400000
Total Cash Available 560000 800500 1118150 1440100 3439200
Less: Cash Disbursements
Direct Material Cost 140000 154000 182000 196000 672000
Direct Labor Cost 45000 49500 58500 63000 216000
Manufacturing Overhead Cost 24500 24850 25550 25900 100800
Selling & Administration Cost 100000 104000 112000 116000 432000
Total Cash Disbursements 309500 332350 378050 400900 1420800
Ending Cash Budget 250500 468150 740100 1039200 2018400

Forecasted Income Statement

Forecasted Income Statement for CHOCOLATE CHIP COOKIE for The Fiscal Year Ending
2019-2020 (July 1, 2019-June 30, 2020)
Sales 2400000
Less: Cost of Goods Sold (DM+DL+MOH) 1016800
Gross Profit 1383200
Less: Expenses
Selling & Administration Expenses 432000
Depreciation 28000
Net Profit 923200

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Forecasted Balance Sheet

Forecasted Balance Sheet for CHOCOLATE CHIP COOKIE for The Fiscal Year Ending 2019-2020
(July 1, 2019-June 30, 2020)
Non-Current Assets 600000
Current Assets: Cash 2018400
Total Assets 2618400
Non-Current Liabilities 150000
Balance, June 30, 2020 2468400

References

• Act202 faculty slides.

• http://www.northendcoffee.com/

• http://www.accounting-basics-for-students.com/balance-sheet-example.html

• https://www.accountingtools.com/articles/2017/5/17/the-income-statement

• North End Coffee Roasters (Apollo Branch) staffs and Manager of the Store.

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