Comptabilité budget pour entreprise

OBJECTIVE OF THE ASSIGNMENT

The objective of the assignment is to be able to contribute effectively to a group project which is about applying the concepts and tools introduced during the course by simulating a real-world decision making situation.

OVERVIEW OF THE ASSIGNMENT

Your task is to create a fictitious company that you will inhabit during approximately one year of its life time. You will accompany your business all along its annual planning and control cycle and have to respond to typical problems that arise during this cycle.

Your business unit will be a manufacturing plant that you have completely invented. Of course your business can be inspired by a real-world company (using information from annual reports, newspaper articles, internet searches, personal contacts…). A part of the credits will be awarded for creativity and level of detail (see evaluation sheet on Moodle).

However, don’t spend excessive amounts of time on collecting information. The focus of the project is on the application of the tools, not on the accurate description of existing companies. Make it interesting, not complicated! The figures you invent just need to be plausible estimates; for instance, when determining the material costs for making bread, you do not need to know to the penny the prices of each ingredient!

ORGANISATION OF THE GROUP WORK

Project work will be done in groups of around 4-5 students (to be determined by the instructor, depends on the class size). Please enter the team members also in the group table document on Moodle.

For calculations, it is required to use Excel worksheets. A basic Excel template is available on Moodle. This template needs to be adapted and completed at your convenience.

Each group must hand in in electronic form both a written document and an Excel worksheet including the results of the group work. Both documents are due two weeks after the last class session (to be posted on Moodle).

Enter all responses (except budgets) directly in this document. For the budgeting part, use the Excel template.

DETAILED INSTRUCTIONS FOR THE PROJECT

1. Choose a manufacturing product. It doesn’t have to be very complex (e.g. skateboards, pens, trombones, tennis rackets, bagels, soap, caddies…).
2. Run a quick internet search to get information about the production process (e.g. “manufacturing process bread”, “How to make a skateboard” …).

I. BUSINESS AND COMPANY PRESENTATION

Enter your responses directly in the spaces provided below. Make sure that the layout is easily readable!

Name of the company: ___________

1. Team members:

___________

1. Describe your company. (Is it large, medium, or small?  Is production labor intensive or capital intensive?)

___________

1.  What is the product you are producing?  

___________

1. Who are your customers? (Individuals, retail business, wholesale businesses)?  What makes your product attractive to these customers?

___________

1. What is considered a unit (of product)?  

___________

1. How many units are normally produced in a day?

___________

1.  How many units have been produced last year?

___________

II. MANUFACTURING PROCESS (FLOW CHART)

Present very schematically the production process by simplifying to the most basic elements. Then identify the costs incurred for each activity: materials, labor, plant & equipment, other costs.

Delete the examples and enter your own data!

EXAMPLE – Bread manufacturing

What you might find on the internet:

[pic 1]

This is how you might simplify the chart showing the main steps in the production process. Show under manufacturing support all the resources that cannot be classified under one of the steps in the manufacturing process.

Activities:

[pic 2][pic 3][pic 4][pic 5][pic 6]

Resources needed:

Materials        Flour                Packaging material        Gas, water        Office material

        Yeast                        

Labor        Cooking workers        Oven operator        Product handler        Plant manager        Sales personnel

                                Cleaning personnel        Sales commissions

                                        General manager

Plant&         Mixing machine        Oven        Slicing machine        Factory building        Computers

Equipment                                        Office furniture

Other costs                                Plant insurance        Advertising fees

It’s up to you to adapt this chart to your company and find more relevant items!

III. ACTUAL COST ANALYSIS

You can immediately start doing Questions 1-4. Questions 4&5 will be covered in detail in Session 4.

1. Enter the materials from the flow chart in Table 1. For each material, determine whether it’s direct or indirect (see more explanations in the box on the next page). For the direct materials, determine the quantity per unit (e.g., kilograms required for each unit), cost per quantity (price per kg), total euros per unit of product for each material. For the indirect material costs, indicate the total cost per month (as the indirect costs cannot be identified with individual units of the product, they need to be estimated for a period). Transfer the indirect manufacturing material costs to the manufacturing overhead chart (Table 4), and the selling, general & administrative materials to Table 5.
2. Enter the labor from the flow chart in Table 2. For each type of labor, determine whether it’s direct or indirect. For direct labor, determine the hours spent on producing the product, and a wage rate. Then total the direct labor cost per unit of product. For the indirect labor, indicate the cost per month. Transfer the indirect manufacturing labor costs to the manufacturing overhead chart (Table 4), and the selling, general & administrative labor to Table 5.
3. For each long-lived asset (property, plant and equipment) you own (that you do not rent) calculate the annual depreciation in Table 3 using the simple straight-line depreciation method. Determine whether the depreciation is a manufacturing overhead cost or a selling, general, and administrative cost. Transfer the costs on the appropriate table (4 or 5).
4. For the other costs, decide whether it’s a manufacturing overhead or a selling, general, and administrative cost. Enter the costs on the appropriate table (4 or 5).

How to identify direct and indirect costs

Direct costs are costs that can be easily identified with each unit of the product. The typical examples are direct material and direct labour costs. Direct materials are raw materials, ingredients, or components that become part of the final product. From the product design plans, the production manager knows exactly how much of each material is used to produce the product, e.g. how much flour is needed to produce a given type of bread. Direct labour refers to the production workers who make or assemble individual units of the product, e.g. a baker who kneads and moulds a loaf of bread.

Indirect costs (also called overhead) are costs that are shared by several units or products, so that the cost cannot be easily identified with individual units or products, e.g. the depreciation of a mixing machine that mixes the dough for the bread, the salary of a supervisor who oversees the production workers, packaging or cleaning materials, the rent paid for the factory building. Indirect costs can occur in the manufacturing plant (manufacturing overhead) or in the company’s other support activities (selling, general & administrative costs).

Table 1: Materials – Direct vs. Indirect

Delete the examples and enter your own data!

Table 2: Labor – Direct vs. Indirect

Delete the examples and enter your own data!

Table 3: Long-Lived Assets Depreciation Schedule

Delete the examples and enter your own data!

Table 4:  Manufacturing Overhead Costs

Show in the table below all the manufacturing overhead costs (indirect materials, indirect labor, other indirect manufacturing costs).

Delete the examples and enter your own data!

*) Fixed cost X 12 = Annual Fixed cost

    Variable cost per unit   X   Number of units per year     = Annual Variable cost