INTRODUCTION:
Budgetary control is the important aspect for industry development because budgets provide
yard stick against which the actual performance is measured. It always helps to the top
management to take the appropriate decision to motivate and directing their personnel towards
well set plans and policies of the company.By considering the advantage of the budgetary
control the Ranna Sugars also adapted this system. In Ranna Sugars they were maintaining the
monthly budget with the help of daily reports. The daily reports must contain the item like
production efficiency, sugar cane utilization, man power requirement, consumption of
electricity, wages etc. With this the budgetary control manager prepares a monthly profitability
statement of a particular month & submitted that one of the appropriate authority like
production manager. By this statement or submitted report, they will take correct decision about
the organizational activities.A study has been conducted on the BUDGETARY CONTROL
which is most probably adopted in the Ranna Sugars organization.Budgetary control i.e. a most
powerful tool to the management for performing its function i.e. formulating plans,
coordinating activities and controlling operations etc, effectively as well as effectively.Now a
day, the number of companies are compete with each other for the survival in the present
market. Whether it may be other sugars industries .but no one company can comete without
proper planning. So the Cost-Budgetary control may help them to make proper decision in the
number of various fields.Budgetary control is applied to a system of management & accounting
control by which all operations & output are forecasted as for ahead as possible. And actual
results are known that are compared without budget estimates.The budgetary system integrates
key managerial functions as it links top managements planning function with the control
function performed at all the levels in the managerial hierarchy. A more accurate budget can be
developed for those activates where direct relationship exists between inputs & outputs. These
input, output are base for developing budgets & exercising control.
CANE MANAGER
CANE OFFICERS
FIELD ASSISTANT
CANE OFFICERS
FIELD ASSISTANT
YEAR
DATE
CANE
DAYS
SUGAR
DEVELOPMEN
T
RECOVERY
PRODUCTIO
N
1999 - 00
25/11/1999 TO 28/06/2000
217
407989 510015
12.50
2000 - 01
19/11/2000 TO 15/05/2001
178
352938 436300
11.91
2001 - 02
29/10/2001 TO 05/04/2002
159
354028 424670
11.41
2002 - 03
21/10/2002 TO 29/04/2003
191
503083 585700
11.47
2003 - 04
05/11/2003 TO 13/01/2004
69
115321 127000
10.68
2004 - 05
21/10/2004 TO 18/01/2005
90
105687 115850
10.88
2005 - 06
02/11/2005 TO 21/04/2006
170
351953 400151
11.39
2006 - 07
28/10/2006 TO 09/06/2007
225
520288 608549
11.60
2007 - 08
20/11/2007 TO 26/05/2008
189
379020 446699
11.65
2008 - 09
02/10/2008 TO 25/02/2009
145
238681 255400
10.60
PRODUCTION DEPARTMENT
LABORATORY INCHARGE
LABORATORY CHEMIST
LABORATORY BOYS
MANUFACTURING CHEMIST
The production department is one of the core parts in every process based industry.
In addition, it plays a vital role in the organization for smooth going in every sugar industries;
Production department is divided in to two sections.
a)Engineering department
b)Manufacturing department
a) Engineering Department.
CHIEF ENGINEER
MECHANICAL
SECTION
ELECTRICAL
SECTION
CANE
WEIGHMENT
BOILER SECTION
CANE
UNHOLDING
URANGMENTS
CANE
PREPARATION
MILLING
POWER
GENERATION
WORKSHOP
STORE SECTION
Cane preparation:
After feeding the sugar cane on feeding tables with the help of levelers which avoid
overloading of sugar cane is sent to primary cutter, which cut the sugar canes in to small pieces,
further fine fibers are obtained from there process by passing them in the fibrizer.
Water treatment
Make up water
Deareator tank
[Heating 1100 C]
Pumping
Stream drum
Turbine
Generator [electricity]
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Stores Section
Various section spare parts are stored in stall system and all the units are computerized and
given a code number. Bin card and other system are followed hear. These stores materials are
normally required for preventive maintenance during seasons and off seasons for servicing and
overalling
Function
1) To make the material requisitions for the purpose of knowing the quantity material.
2) To make purchase order or in simple terms the tender.
3) To make approval memo for verification of materials.
4) The main function of store department is to prepare a bin card.
5) The store department issued material with reference with store requisition.
6) To make classification & codification of materials.
7) Receipt of material.
8) Inspect it with ordered quantity, quality & if any other specifications.
9) Some of the material like chemical is to be sent to laboratory for incepatation & testing.
10) Getting indents from departmental head & issuing it.
11) To make purchase return if the material are rejected.
12) To maintain minimum level of materials.
13) Infringing purchase department when material required
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2). Co-Ordination:
The common objectives of the firm may be successfully achieved by the way of budgetary control
because it stimulates the co-operation of all concerns with the co-ordinates the various activities.
3) Communication:
It is necessary in an efficient organization that all people be informed about the objectives, polices,
programmers and performance. This is made possible through their Participant in the budgeting
process. Budgets inform each manager of what others have agreed to do. They also inform
managers of the resources available objects and targets.
Thus the budgeting system integrates key managerial functions as it links top managements
planning function with the function performed at all the levels in the managerial hierarchy. But the
efficiency of the budget as a planning and control device depends upon the activity in which it is
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CONCEPT OF BUDGETING:
One of the primary objects of cost accounting is to provide information to business management
for planning and control. Budgeting act as a toll of both planning and control. Budgeting is a
formal process of financial planning using estimated and accounting data.
ESSENTIALS OF BUDGET:
It is prepared in advance based on a future plan of action.
It relates to a future period and based on objective to be attained.
It is a statement expressed in monetary and for physical units prepared for the
implementation of policy formulated by the management.
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to the
CLASSIFICATION OF BUDGETS:
A. According to time:
Long term budgets: A budget is designed for a period of 5 to 10yrs.
Short term budgets: A budget is a generally prepared for a period of Not exceeding 5
years
Current Budgets: The budgeted is prepared for a month or a quarter.
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Forecasting sales:
The three main factors that should be considered by management in forecasting sales.
1) Information concerning past performance.
2) Information about present condition with in the individual company & in each sales territory.
3) Data concerning the industry & generally business.
2) Production budget:
A production budget is stated in physical units. Essentially the production budget is the sales
budget adjusted for inventory changes as follows.
Units produced= Budgeted Sales+ (Desired Closing Inventory of Finished Goods-Beginning
Inventory of Finished Goods.)
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i.
Inventory budget:
An inventory budget can be prepared to find out the values of direct materials & finished goods
inventory.
a.
It is also known as the marketing expenses budget. The selling cost budget is made up of a
number of cost items, some of which are fixed and some variable. Fixed expenses are salaries and
depreciation; the principal variable expenses are commission, travel advertising and bad debts.
manufacturing business activates. The administrative expenses budgets contains expenses like
directors remunerations, legal charges, audit fees, salaries, rent office expenses, interest, property
tax, put etc.
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C. BUDGET MANUAL:
The budget manual is a written document, which specifies the objective of the budgeting
organization & procedures.
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F. BUDGETED PROCEDURE:
The procedure followed while designing and operating a budgetary control system depends
upon the nature of the business.
THE PROCEDURE AS FOLLOWS:
2. Making of forecasts:
Forecast is nothing but estimation of probabilities for a given period. Forecasts are made
regarding sales, production cost and financial requirements of the business.
4. Preparation of budgets:
After finalization of forecasts the budgets will be prepared.
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Tips:
1. Don't try to fit your expenses into somebody else's budget categories. Tailor the categories
to fit your own situation.
2. Make your categories detailed enough to provide useful information, but not so detailed
that you become bogged down in trivial details.
3. Think of your budget as a tool to help you get out of debt and save money, not as a
financial diet.
LIMITATIONS:
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Considering the scope mentioned above, some or few limitations are arising i.e. the Rona
Sugars is big organization. This finance & accounts is also big departments. But due to shortage of
training period, I am concentrating only on the budgetary control of costing departments.
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Time constraints.
Only Three years data is used for the analysis of the study
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