Master Budgeting For Bhelpuri – 2019 & 2020

Spring 2021

Submitted to

Mr. Rezwanul Mumtahin Husain

Lecturer, Department of Accounting & Finance

Submitted by:

Name:

ID:

Roll:

Course: ACT202

Section:

Date of submission:

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 Executive Summary
Bhelpuri's primary target market consists of low-income and middle income earning groups of
people as well as school, college, and university students. The Master Budget covers the two
years of a Bhelpuri business, 2019 and 2020 including Sales, Production, Direct Raw materials,
Direct labor, Manufacturing Overheads, Selling and administration and Cash Budget. We created
a budget for the next two years. The budget's first year is 2019, the year before the Covid19
pandemic. The second budget is for the Covid19 fiscal year. In 2019, 73 plates would be sold
each day. This, however, differs from day to day. In 2019, they made a good profit with a small
investment. They will, however, incur some losses in 2020 as a result of the lockdown. The
following Bhelpuri business budgets are thoroughly detailed in the report, along with additional
workings.

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 Table of contents

Executive Summary..................................................................................................................................2
Table of contents.......................................................................................................................................3
Introduction...............................................................................................................................................4
Sales Budget and Expected Cash Collection.........................................................................................5
Production Budget....................................................................................................................................6
Direct Materials Budget...........................................................................................................................7
Direct Labor Budget.................................................................................................................................8
Manufacturing Overhead Budget...........................................................................................................9
Selling and Administration Expense Budget......................................................................................10
Cash Budget............................................................................................................................................11
Conclusion and Recommendation........................................................................................................12

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 Introduction

Bhelpuri is a common and popular street food in Dhaka. Every neighborhood has at least one
Bhelpuri-wala (bhelpuri seller). It is a savory snack as well as a type of chaat. The Bhelpuri is
made of puri very similar to fuchka shells, potatoes, vegetables, and cucumber toppings. Finally,
it's topped with a tangy tamarind sauce. This bhelpuri business has started in the year 2015. This
report consist the Master budget for the 2019 and 2020. The master budget is an all-
encompassing financial planning document. It mainly contains all of the lower-level budgets
contained within the operating and financial budgets. Similarly in the above master budget we
can see the whole outcome on how the business has fluctuated due to the covid-19 pandemic.

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 Sales Budget and Expected Cash Collection

2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Projected
2279 2858 2695 3190 2384 3611 2458 3219 2863 2993 3109 2890 34549
Sales
Price 23 23 23 23 23 23 23 23 23 23 23 23 23
Expected
BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
cash
52,417 65,734 61,985 73,370 54,832 83,053 56,534 74,037 65,849 68,839 71,507 66,470 794,627
collection

In February, extra sales were assumed because there 3 special occasions. One, Pohela Falgun, Second
Valentine's day and third 21st February. In March there's 17th March, 26th March; in April there's
Pohela Boishakh so sales were pretty good at that time. In May sales were very less because in May
2019 it was Ramadan. In June and August, sales increased as it was the time of Eid-Ul-Fitr and Eid-Ul-
Azha respectively as a result sale increased the price per plate during the time.

In 2018, selling price was BDT20. It increased 15% in 2019.

=> 20 X 15% = BDT3

=>20 + 3 = BDT23

2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Projected 2630 2930 1018 100 110 316 808 1260 1305 1485 1821 2101 15884
Sales
Price 26 26 26 20 20 20 20 20 20 20 20 20  

Expected BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
cash 68,380 76,180 26,468 2,000 2,200 6,320 16,160 25,200 26,100 29,700 36,420 42,020 357,148
collection

As price increases 15% every year, for January to March the price would be
=> 23 X 15%= 3.35
=> 23 + 3.35= BDT26
The sales started to reduce from month of March due to an unexpected pandemic followed by a full
country wide lockdown. The price of Bhelpuri is reduced by 22% to BDT18 from April.

=> 26 X 22% = 5.72

=> 26 – 6 = BDT20

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 Production Budget

2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

Budgeted unit sales

2279 2858 2695 3190 2384 3611 2458 3219 2863 2993 3109 2890 34549

Add: Desired ending

finished Goods 360 375 289 383 253 382 247 200 233 212 256 185 3375
inventory

2639 3233 2984 3573 2637 3993 2705 3419 3096 3205 3365 3075 37924
Total Needs

Less: Units of
beginning Finished 253 184 286 290 244 185 247 248 231 197 207 186 2758
Goods Inventory

Required Production 2386 3049 2698 3283 2393 3808 2458 3171 2865 3008 3158 2889 35166
in Units

The Bhelpuri's owner determined that due to the corona pandemic, they would not be able to sell as many
Bhelpuri in 2020, so they purchase fewer products than was considered a desired ending inventory for 2019 and
2020.

2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total

2630 2930 1018 100 110 316 808 1260 1305 1485 1821 2101 15884
Budgeted unit sales

Add: Desired ending

finished Goods 190 130 98 42 41 54 66 72 79 72 98 120 1062
inventory

Total Needs
2820 3060 1116 142 151 370 874 1332 1384 1557 1919 2221 16946

Less: Units of
beginning Finished 120 95 88 32 22 53 53 75 83 60 95 112 888
Goods Inventory

Required Production 2700 2965 1028 110 129 317 821 1257 1301 1497 1824 2109 16058
in Units

From April 2020, the required production declined due to the lockdown, But it again increased slowly as
shop’s started to operate from the month of July.

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 Direct Materials Budget
2019 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Production 2386 3049 2698 3283 2393 3808 2458 3171 2865 3008 3158 2889 35166

Units of Raw Materials

1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05 1.05
Per piece

Total Raw Materials

2505.3 3201.45 2832.9 3447.15 2512.65 3998.4 2580.9 3329.55 3008.25 3158.4 3315.9 3033.45 36924.3
consumed

Add: desired Raw

37 39 29 35 26 18 32 15 29 34 18 32 344
materials in units

Total units of raw

2542.3 3240.45 2861.9 3482.15 2538.65 4016.4 2612.9 3344.55 3037.25 3192.4 3333.9 3065.45 37268.3
materials needed

Less: beginning raw

34 26 38 28 24 36 37 29 41 29 21 45
materials in units 388

Raw materials to be
2508.3 3214.45 2823.9 3454.15 2514.65 3980.4 2575.9 3315.55 2996.25 3163.4 3312.9 3020.45 37268.3
purchased

Cost of raw materials BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
(BDT18/kg) 45,149 57,860 50,830 62,175 45,264 71,647 46,366 59,680 53,933 56,941 59,632 54,368 670,829

Direct material budget BDT1.05 per piece so we assume that to produce 1 piece of bhelpuri on our
demand forecast for 2019. But in 2020 it decreased to 1.01. The cost of raw materials is BDT18 per kg
for both of the years.

2020 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
Production 2700 2965 1028 110 129 317 821 1257 1301 1497 1824 2109 16058

Units of Raw Materials

1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01 1.01
Per piece

Total Raw Materials

2727 2994.65 1038.28 111.1 130.29 320.17 829.21 1269.57 1314.01 1511.97 1842.24 2130.09 16218.58
consumed

Add: desired Raw

53 69 30 5 8 15 20 18 16 20 41 23 318
materials in units

Total units of raw

2780 3063.65 1068.28 116.1 138.29 335.17 849.21 1287.57 1330.01 1531.97 1883.24 2153.09 16536.58
materials needed

Less: beginning raw

35 27 22 9 5 10 12 15 26 35 32 25 253
materials in units

Raw materials to be
2745 3036.65 1046.28 107.1 133.29 325.17 837.21 1272.57 1304.01 1496.97 1851.24 2128.09 16283.58
purchased

Cost of raw materials BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
(BDT20/kg) 54,900 60,733 20,926 2,142 2,666 6,503 16,744 25,451 26,080 29,939 37,025 42,562 325,672

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 Direct Labor Budget

2019 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Units Produced 2386 3049 2698 3283 2393 3808 2458 3171 2865 3008 3158 2889 35166

Direct Labor per

0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
Unit

Total Direct Labor

238.6 304.9 269.8 328.3 239.3 380.8 245.8 317.1 286.5 300.8 315.8 288.9 3516.6
Hour

Rate Per Hour 30 30 30 30 30 30 30 30 30 30 30 30 30

Total Cost of Direct BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Labor Hour 7,158 9,147 8,094 9,849 7,179 11,424 7,374 9,513 8,595 9,024 9,474 8,667 105,498

We assume that we need 2 labors to continue the required production. The rate per hour is BDT30.
Although, the labor costs increased by 8% per year.

2020 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Units Produced 2700 2965 1028 110 129 317 821 1257 1301 1497 1824 2109 16058

Direct Labor per

Unit 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10

Total Direct Labor

Hour 270 296.5 102.8 11 12.9 31.7 82.1 125.7 130.1 149.7 182.4 210.9 1605.8

Rate Per Hour 30 30 30 30 30 30 30 30 30 30 30 30 30

Total Cost of Direct BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Labor Hour 8,100 8,895 3,084 330 387 951 2,463 3,771 3,903 4,491 5,472 6,327 48,174

Direct labor per unit and Rate per hour is the same as previous years even in pandemic for the layoff
policy.

Manufacturing Overhead Budget

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 2019 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Budgeted Direct
238.6 304.9 269.8 328.3 239.3 380.8 245.8 317.1 286.5 300.8 315.8 288.9 3516.6
Labor hours

Variable MOH rate 6 6 6 6 6 6 6 6 6 6 6 6 6

Variable MOH costs 1431.6 1829.4 1618.8 1969.8 1435.8 2284.8 1474.8 1902.6 1719 1804.8 1894.8 1733.4 21099.6

Fixed MOH cost 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

Total MOH cost 3431.6 3829.4 3618.8 3969.8 3435.8 4284.8 3474.8 3902.6 3719 3804.8 3894.8 3733.4 45099.6

Less: Depreciation 50 50 50 50 50 50 50 50 50 50 50 50 600

Cash disbursements BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
for MOH 3,382 3,779 3,569 3,920 3,386 4,235 3,425 3,853 3,669 3,755 3,845 3,683 44,500

We assume that variable manufacturing overhead costs is 5% of total sales and fixed manufacturing
overhead costs was BDT2000 per month was assumed.

2020 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Budgeted Direct
Labor hours 270 296.5 102.8 11 12.9 31.7 82.1 125.7 130.1 149.7 182.4 210.9 1605.8

Variable MOH rate 6 6 6 6 6 6 6 6 6 6 6 6 6

Variable MOH costs 1620 1779 616.8 66 77.4 190.2 492.6 754.2 780.6 898.2 1094.4 1265.4 9634.8

Fixed MOH cost 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 24000

Total MOH cost 3620 3779 2616.8 2066 2077.4 2190.2 2492.6 2754.2 2780.6 2898.2 3094.4 3265.4 33634.8

Less: Depreciation 51 51 51 51 51 51 51 51 51 51 51 51 612

Cash disbursements BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
for MOH 3,569 3,728 2,566 2,015 2,026 2,139 2,442 2,703 2,730 2,847 3,043 3,214 33,023

Manufacturing overhead cost there was no manufacturing cost from April to July as the shop was closed
due to lockdown but cost started to increase from month of August as lockdown restrictions started to
reduce. However, fixed cost were same as 2019 because it is always constant.

Selling and Administration Expense Budget

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 2019 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Grease Payment 510 510 510 510 510 510 510 510 510 510 510 510 6120

Rent 1224 1224 1224 1224 1224 1224 1224 1224 1224 1224 1224 1224 14688

Utility 204 204 204 204 204 204 204 204 204 204 204 204 2448

Total 1938 1938 1938 1938 1938 1938 1938 1938 1938 1938 1938 1938 23256

Less: Depreciation 51 51 51 51 51 51 51 51 51 51 51 51 612

Cash disbursements for BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Selling & Administration
1,887 1,887 1,887 1,887 1,887 1,887 1,887 1,887 1,887 1,887 1,887 1,887 22,644

Selling and administration cost increases 2% every year as per the outline.
=>500 X 2%= BDT10
1200 X 2%= BDT 24
200 X 2%= BDT 4
50 X 2%= BDT 1

2020 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Grease Payment 520 520 520 520 520 520 520 520 520 520 520 520 6240

Rent 1248 1248 1248 1248 1248 1248 1248 1248 1248 1248 1248 1248 14976

Utility 208 208 208 208 208 208 208 208 208 208 208 208 2496

Total 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 1976 23712

Less: Depreciation 52 52 52 52 52 52 52 52 52 52 52 52 624

Cash disbursements for BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Selling & Administration
1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 23,088

=>510 + 10 = BDT 520

1224 + 24 = BDT 1248
204 + 4 = BDT 208
51 +1 = BDT 52

Cash Budget
2019 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Beg. Cash Balance 37531 32372 25433 23038 18577 15693 9553 7035 6139 3904 3776 4179 187230

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Total Sales 52417 65734 61985 73370 54832 83053 56534 74037 65849 68839 71507 66470 794627

Total Cash available 89948 98106 87418 96408 73409 98746 66087 81072 71988 72743 75283 70649 981857

(-)Cash Disbursements

Direct Materials 45149 57860 50830 62175 45264 71647 46366 59680 53933 56941 59632 54368 670829

Direct Labor 7158 9147 8094 9849 7179 11424 7374 9513 8595 9024 9474 8667 105498

Manufacturing OH 3382 3779 3569 3920 3386 4235 3425 3853 3669 3755 3845 3683 44500

Selling & Admini. 1887 1887 1887 1887 1887 1887 1887 1887 1887 1887 1887 1887 22644

57576 72673 64380 77831 57716 89193 59052 74933 68084 71607 74838 68605 843471

BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Net Cash Balance
32,372 25,433 23,038 18,577 15,693 9,553 7,035 6,139 3,904 1,136 445 2,044 138,386

2020 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Beg. Cash Balance 20744 20,631 21,531 19,499 15,088 10,285 5,088 -2,325 -2,325 -8,938 -18,439 -29,483 51,356

Total Sales 68,380 76,180 26,468 2,000 2,200 6,320 16,160 25,200 26,100 29,700 36,420 42,020 357,148

Total Cash available 89124 96,811 47,999 21,499 17,288 16,605 21,248 22,875 23,775 20,762 17,981 12,537 408,504

(-)Cash Disbursements                          

Direct Materials 54,900 60,733 20,926 2,142 2,666 6,503 16,744 25,451 26,080 29,939 37,025 42,562 325,672

Direct Labor 8,100 8,895 3,084 330 387 951 2,463 3,771 3,903 4,491 5,472 6,327 48,174

Manufacturing OH 3,569 3,728 2,566 2,015 2,026 2,139 2,442 2,703 2,730 2,847 3,043 3,214 33,023

Selling & Admini. 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 1,924 23,088

68,493 75,280 28,500 6,411 7,003 11,517 23,573 33,849 32,713 39,201 47,464 54,027 429,957

BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT BDT
Net Cash Balance
20,631 21,531 19,499 15,088 10,285 5,088 (2,325) (10,974) (8,938) (18,439) (29,483) (41,490) (21,453)

Conclusion and Recommendation

Due to sudden pandemic a lockdown from mid of March was imposed which caused sales to decline
rapidly and growth also decreased. We were definitely not ready for this unexpected event to occur and

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disrupt our business. This caused less profits and revenue for the year 2020. In this cash budget we can
see that their total ending balance was BDT 138386 in 2019. It’s a normal year that’s why they had a
good position. But in 2020 due to corona pandemic everything goes to against. They had little sales but
their fixed expenses are remaining same. That why they made a loss of BDT 21453.

As we all know, the government of Bangladesh has declared a state of emergency due to the corona
pandemic. As a result, people are unable to leave, particularly children and teenagers, who are the
primary customers of a Bhelpuri Stall. In that case, sales in 2020 fell by 70% compared to sales in 2019.

As a result, I believe that businesses should be prepared for any unexpected natural disasters. They
should have enough cash on hand to cover any upcoming natural disasters or calamities.

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