m Remark Manufacturing ² Marking your Fashion

m Location ² Bhiwandi

m Manufacturing of Takka ² cutpiece

m Supply to Textile and Garment industry

  Inbound Logistics : the receiving and warehousing of raw
materials , and their distribution to manufacturing as their
required

Operations : The processes of transforming inputs into

finished products and services

 Outbound Logistics : The warehousing and distribution of

finished goods

 Marketing and Sales : the identification of customer needs and

the generation of sales

 Service : the support of customers after the products and

services are sold to them
  




   







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 MANUFACTURING COSTS FIXED /
VARIABLE
MATERIAL

---- YARN VARIABLE

---- C TT N VARIABLE

---- FIBRE VARIABLE

J B W RK (LAB R) VARIABLE

MANUFACTURING VERHEADS FIXED

 NON MANUFACTURING COSTS FIXED /
VARIABLE
ADMINISTRATION

---- SALARIES FIXED

---- OTHERS FIXED

SALES AND DISTRIBUTION

---- MARKETING FIXED

---- SELLING IN ENTIVES VARIABLE

 Break even point of business is the point at which there is neither
profit nor loss to our firm

ASSUMPTIONS :

 All cost can be easily classified into fixed and variable cost

Prices of output and input remained unchanged
 There will be no significant change in the level of inventory
 The company manufacture s a single product
 Productivity of factors of production remain same

BEP (units) : Fixed cost / contribution per unit

BEP (sales) : Fixed cost / P V Ratio

 Outsourcing
V/s In
sourcing

Make or buy
JIT
decisions

Opportunity
Pricing &
cost
Product Mix
approach

arrying
cost of
inventory
= Budget:
It is a financial and / or quantitative statement, prepared and
approved prior to defined period of time, of the policy to be
pursued during the period for the purpose of attaining a
given objective

Budgeting:
It is a whole process of designing, implementing and
operating budget

Budgetary control:
It is establishment of budget relating the responsibilities of
executives to the requirements of a policy and the continuous
comparison of the actual with budgeted result either to
secure by individual action the objective of that policy or to
provide a basis for its revision
 CLASSIFICATION OF BUDGETS

AORDING TO AORDING TO AORDING

TIME FUNTION FLEXIBILITY

 Long term budget  Sales budget  Fixed

Short term budget
Production budget
Flexible
 urrent budget  ost of Production budget
 Rolling budget  Purchase budget
 Personnel budget
6 R & D budget
7 apital Expenditure budget
8 ash budget
9 Master budget



 SALES BUDGET:
Sales budget is the most important budget based on which
all the other budgets are built up This budget is a forecast of
quantities and values of sales to be achieved in a budget
period

PRODUCTION BUDGET:
Production budget involves planning the level of production
which in turn involves the answer to the following
questions:
a What is to be produced?
b When is it to be produced?
c How is it to be produced?
d Where is it to be produced?

  COST OF PRODUCTION BUDGET:
This budget is an estimate of cost of output planned
for a budget period and may be classified into ²
‡ Material ost Budget
‡ Labour ost Budget
‡ Overhead ost Budget

 PURCHASE BUDGET:
This budget provides information about the
materials to be acquired from the market during
the budget period


 PERSONNEL BUDGET:
This budget gives an estimate of the requirements of
direct labour essential to meet the production
target
This budget may be classified into ²
a Labour requirement budget
b Labour recruitment budget
6 RESEARCH AND DEVELOPMENT BUDGET:
This budget provides an estimate of expenditure to be
incurred on R & D during the budget period
A R&D budget is prepared taking into consideration
the research projects in hand and new R & D projects to
be taken up

7 CAPITAL EXPENDITURE BUDGET:
This is an important budget providing for acquisition
of assets necessitated by the following factors:
a Replacement of existing assets
 Purchase of additional assets to meet increased
production
c Installation of improved type of machinery to reduce
costs
8 CASH BUDGET:
This udget gives an estimate of the anticipated
receipts and payments of cash during the udget
period
ash udget makes the provision for minimum cash
6
alance to e maintained at all times
9 MASTER BUDGET:
IMA defines this udget as ´ The summary udget
incorporating its component functional udget and which is
finally approved, adopted and employedµ
Thus master udget is a summary of all functional udgets
in capsule form availale in one report
 FIXED BUDGET:
This is defined as a udget which is designed to remain
unchanged irrespective of the volume of output or turnover
attained
This udget will, therefore, e useful only when the actual
level of activity corresponds to the udgeted level of
activity
7
 FLEXIBLE BUDGET:
IMA defines this udget as one ´ which, y recognising
the difference in ehaviour etween fixed and variale
costs in relation to fluctuations in output, turnover or
other variale factors such as numer of employees, is
designed to change appropriately with such fluctuationsµ

8
üIn this system of costing, the cost object is masses of identical or similar
units of a product or service For eg: itibank provides the same service to all
its customers when processing customer deposits

üIn this system we divide the total number costs of producing an identical or
similar product or service by the total number of units produced to obtain a
per unit cost This per unit cost is the average unit cost that applies to each of
the identical or similar units produced in that period

ü In our case which is a manufacturing process-costing setting, each unit

receives the same or similar amounts of direct material costs, direct
manufacturing labor costs, and indirect manufacturing costs which are
manufacturing overheads
üOur direct materials are yarn, cotton and fibre

üThe finished cloth is produced in the production department Upon

completion, these finished goods are transferred to the packaging
depatrment for packaging, tagging etc

üOur only indirect cost category is conversion costs These costs include
manufacturing labor, energy, plant depreciation and so on

onversion
costs added
slowly Transfer

Production Packaging
Department Department

Direct materials added at the

beginning