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Khana’s Coffee House Case Study

Essay by   •  February 7, 2018  •  Case Study  •  1,350 Words (6 Pages)  •  1,102 Views

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Page 1 of 6

             

  Table of contents

   

Topics

Page Number

Introduction

5

Sales Budget

6

Production Budget

6

Direct Materials Budget

7

Direct Labor Budget

8

Manufacturing overhead Budget

9

Selling and Administrative Expense Budget

10

Cash Budget

11

Budgeted Income Statement

12

Budgeted Balance Sheet

13

Conclusion

14

Introduction:

Khana’s is a small local coffee house situated in khilgoan taltola. The interest by consumers in the coffee house industry is sweeping the country. Khana’s will provide a friendly, comfortable atmosphere where the customer can receive quality coffee and service at a cheapest price. The coffee house will offer a variety of choices to the customers. All sorts of coffee will be offered. Khana’s is operating as a Sole Proprietorship. It is a roadside coffee house. Customers can easily take coffee on the go. This coffee shop has a small place with two tables and eight chairs where customers can sit and have their conversation over a cup of coffee.

Khana’s is maintaining by its owner and two sales man. For the last two years this coffee house is serving its quality coffee to its customers surrounding the local area in a really cheapest price. They conduct all their sales on monthly basis and also collect the payments on cash. They don’t have any Accounts Receivable. They also pay for their direct materials on cash so for that also they don’t have any Accounts Payable.

NATURE OF THE BUSINESS

The nature of the business of a coffee stall is just like the proprietorship. In proprietorship, he has to bear all the loss and get all the profit.

        

Sales Budget

Details

Quarter  1

Quarter 2

Quarter 3

Quarter  4

Year

Budgeted Sales in units

6550

4250

6350

7750

24900

Selling price per unit

50

50

50

50

50

Total budgeted sales

327500

212500

317500

387500

1245000

Components:

  1. Budgeted sales for the quarters are:

     Quarter 1 = 6550 units,  

           Quarter 2 = 4250,  

           Quarter 3 = 6350,    

           Quarter 4 = 7750   

     2. The selling price per unit is 50 Taka.

     3. All sales are made in cash, there are no on hand sales.

                                       The Production Budget

Details

Quarter 1

Quarter 2

Quarter 3

Quarter 4

Year

Budgeted sales

6550

4250

6350

7750

24900

Required production

6550

4250

6350

7750

24900

The production is on daily instant order basis. So there are no beginning or ending production inventory.

Direct Materials Budget

Details

quarter 1

quarter 2

quarter 3

quarter 4

Year

Production

6550

4250

6350

7750

24900

Materials per unit gram

180

180

180

180

180

Productions needs

1179000

765000

1143000

1395000

4482000

Add: Desired ending inventory

99000

123000

150000

180000

180000

Total needs

1278000

888000

1293000

1575000

4662000

Less: Beginning inventory

80000

99000

123000

150000

80000

Materials to be purchased

1198000

789000

1170000

1425000

4582000

Cost of raw materials per gram

0.105

0.105

0.105

0.105

0.105

Cost of raw materials to be purchased

125790

82845

122850

149625

481110

...

...

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