final-report-nakshi-kantha.pdf - Introduction to managerial...

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Introduction to managerial accountingReport on identifying Costs for Making Nakshi Kantha, Performing CVP Analysis, and Preparing Master Budget Course:ACT202 Section:19 Submitted to: Bushra Ferdous Khan Submitted by:Name ID Salma Marium 1611249030 Farzana Rahman 1821173630 Tania Rahman 1731583630 Fariya Ferdous Prova 1812518630 Rafat Sazzad Labonno 1731937630 Nazia Afrin Anee 1320961030
2 TABLE OF CONTENTS Executive Summary 1. Introduction:……………………………………………………………………………………………………………………………5 2. Production Process:…………………………………………………………………………………………………………………6 3. Cost Identification for the Business:………………………………………………………………………………………..8 4. Manufacturing cost per unit:…………………………………………………………………………………………………... 145. Unit Selling Price:…………………………………………………………………………………………………………………….15 6. Cost-Volume-Profit (CVP) Analysis:………………………………………………………………………………………….16 7. Master Budget:……………………………………………………………………………………………………………………….18 7.1 SALES BUDGET:……………………………………………………………………………………………………………………..21 7.2 PRODUCTION BUDGET:…………………………………………………………………………………………………………22 7.3 DIRECT MATERIALS BUDGET:…………………………………………………………………………………………………23 7.4 DIRECT LABOUR BUDGET:……………………………………………………………………………………………………..25 7.5 MANUFACTURING OVERHEAD BUDGET:……………………………………………………………………………….27 7.6 SELLING AND ADMINISTRATIVE EXPENSES BUDGET:……………………………………………………………..28 7.7 Cash Budget:………………………………………………………………………………………………………………………….30 7.8 Forecasted Income Statement:……………………………………………………………………………………………..37 7.9 Forecasted Balance Sheet:…………………………………………………………………………………………………….38 8. Conclusion………………………………………………………………………………………………………………………………39 reference
3 EXECUTIVE SUMMARY The following project is on a certain merchandising shop that sells nakshi kantha. And so, we are targeting the only product available nakshi kantha. The project draws a Master Budget for nakshi kantha for the upcoming financial year. The project starts with a brief introduction of the product, and so forth contains the relevant information needed in preparing the Master Budget. Firstly, it starts with a brief explanation of the production process. Then it moves on to identifying the costs expected to incur for the business. Next, the manufacturing cost per unit is calculated using the absorption method costing system as the products are taken as to be homogeneous. The manufacturing cost per unit comes to be Tk. 2100. Next, the unit selling price of the product is calculated, for which at first we calculated the total fixed cost per month which is Tk. 155415, then we calculate the variable cost per unit and the result comes to be Tk. 2056.793. The total cost per month comes to be Tk. 2212208 and the total cost per unit results to be Tk. 2212. Then the unit selling price is counted which results to be Tk. 3318. Next, an analysis of Cost-Volume-Profit is shown with its interpretations, with a graph. The contribution margin results to be Tk. 1261.207. The company breaks even in 123 units and earns its break-even revenue at Tk. 408114. The contribution margin results to be Tk. 3249583, and by selling 980 units in the first month, we earn a net operating income of Tk. 3094168, and find the degree

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