ETIKA BISNIS

PREPARATION OF BUDGETS

Kelompok 4
Agnes Maria Sri Hartati (1926000061)
Ni Wayan Asri Mustika (2026000001)
Anisyah Tiarasani (2026000005)
Farid Ma’Ruf (2026000016)
Wiwin Kusuma Pratiwi (2026000023)

PROGRAM MAGISTER MANAJEMEN TAHUN 2020/2021

PERBANAS INSTITUTE
PREPARATION OF BUDGETS

PT ABC is comtemplating to prepare budgets for January, February, and March. It sells its two
products in three sales areas. The company’s balance sheet for the year just ended is shown in
Table 1.
Sales areas X, Y, and Z respectively produce 10 per cent and 70 per cent of Product A sales and
50 per cent, 30 per cent and 20 per cent of Product B sales. The selling price for Product A is
Rp147.000,- and for Product B is Rp205.800,-.
Sales are made on 50 per cent cash and 50 per cent credit basis. The credit sales are collected in
the following month.
Creditors Rp 180.810.000,00
Provision for Devidend Rp 44.100.000,00
share Capital Rp 4.280.787.000,00
Total Rp 4.505.697.000,00

Cash Rp 176.400.000,00
Debtors Rp 220.500.000,00
Stock
Raw Materaial (15.750 at Rp14.700) Rp 231.525.000,00
Finished Goods:
Product A (720 at Rp117.600) Rp 84.672.000,00
Product B (1800 at Rp147.000) Rp 264.600.000,00
Rp 580.797.000,00

Plant and Machinery Rp 4.410.000.000,00

Less : Accumulated depreciation Rp 882.000.000,00
Rp 3.528.000.000,00
Total Rp 4.505.697.000,00
Tabel 1 : Balance Sheet
Sales for December 20XX were US$ 30,000. The monthly forecast of sales (units) are shown
below:

Units Jan Feb Mar Apr

A 900 1050 1200 1350
B 2250 2400 2550 2700

The production of both Products A and B uses one common material, which costs Rp14.700,- per
unit. Two units of material are required to manufacture one unit of Product A while Product B
requires four units for the same material. Wages are paid at the rate of Rp88.200,- per hour
during which it can produce one unit of A or B. The PT ABC has a policy of maintaining a basic
finished goods inventory equal to 80 per cent of next month’s production needs.
The payments to creditors are made during the month for the following purchase. Salaries and
wages are paid during the month they accrue. Sales commission is 5 per cent of sales and is paid
during the month earned. An equipment costing Rp22.050.000,- will be purchased in February
and the payment will be made in the same month. A minimum cash balance of Rp176.400.000,-
at the end of each month is intended to be maintained by the PT ABC. Money can be borrowed
or repaid in multiples of Rp44.100.000,-. Interest rate on loans is 6 per cent per year. Loans are
initiated on the first day of month and repaid on the last day of month. Interest is paid when the
principal is repaid.
The other estimated monthly expenses are:
Salaries Rp 22.050.000,00 paid as incurred
Rent Rp 8.820.000,00 paid as incurred
Depreciation Rp 26.460.000,00
Miscellaneous 1% of sales paid as incurred
Sales Budget
Table 2 is contructed to show the sales budget for the PT ABC. The sales budget may look like
the projections of raw sales data. The sales area managers will be involved in the preparation of
the sales budget.
Months
Area and Products Total
Jan Feb Mar
Sales Area X
Product A Rp 13.230.000,00 Rp 15.435.000,00 Rp 17.640.000,00 Rp 46.305.000,00
Product B Rp 231.525.000,00 Rp 246.960.000,00 Rp 262.395.000,00 Rp 740.880.000,00
Total Rp 244.755.000,00 Rp 262.395.000,00 Rp 280.035.000,00 Rp 787.185.000,00

Sales Area Y
Product A Rp 26.460.000,00 Rp 30.870.000,00 Rp 35.280.000,00 Rp 92.610.000,00
Product B Rp 138.915.000,00 Rp 148.176.000,00 Rp 157.437.000,00 Rp 444.528.000,00
Total Rp 165.375.000,00 Rp 179.046.000,00 Rp 192.717.000,00 Rp 537.138.000,00

Sales Area Z
Product A Rp 92.610.000,00 Rp 108.045.000,00 Rp 123.480.000,00 Rp 324.135.000,00
Producr B Rp 92.610.000,00 Rp 98.784.000,00 Rp 104.958.000,00 Rp 296.352.000,00
Total Rp 185.220.000,00 Rp 206.829.000,00 Rp 228.438.000,00 Rp 620.487.000,00

Total of all assets Rp 595.350.000,00 Rp 648.270.000,00 Rp 701.190.000,00 Rp1.944.810.000,00

Tabel 2: Sales Budget

Production Budget
Table 3 is contructed to show the sales budget for the PT ABC. Production Budget is prepared
after the sales budget. It is based on sales forecasts. To prepare the production budget, the sales
forecasts for each product are combined with information about the beginning level and the
expected level of ending inventories of the finished products.
 Months
Jan Feb Mar
Estimate sale of A Rp 13.230.000,00 Rp 15.435.000,00 Rp 17.640.000,00
Desire eding inventory Rp 12.348.000,00 Rp 14.112.000,00 Rp 15.876.000,00
Rp 25.578.000,00 Rp 29.547.000,00 Rp 33.516.000,00
(Beginning inventory) Rp 10.584.000,00 Rp 12.348.000,00 Rp 14.112.000,00

Units of A to be produced Rp 14.994.000,00 Rp 17.199.000,00 Rp 19.404.000,00

Estimated sale of B Rp 33.075.000,00 Rp 35.280.000,00 Rp 37.485.000,00

Desired ending inentory Rp 28.224.000,00 Rp 29.988.000,00 Rp 31.752.000,00
Rp 61.299.000,00 Rp 65.268.000,00 Rp 69.237.000,00
(Beginning inventory) Rp 26.460.000,00 Rp 28.224.000,00 Rp 29.988.000,00

Units of B to be peoduced Rp 34.839.000,00 Rp 37.044.000,00 Rp 39.249.000,00

Tabel 3: Production Budget

Purchasing Budget
Table 4 is contructed to show the sales budget for the PT ABC. After having prepared the
production budget, the materials usage and the purchasing budget can be easily constructed. The
material usage depends upon the level of production and the levels of beginning inventory and
desired ending inventories.
Months
Jan Feb Mar
Material needed to produce A
(1 unit of A x 2 units od mat.) Rp 29.988.000,00 Rp 34.398.000,00 Rp 38.808.000,00
Material needed to produce B
(1 unit of A x 4 units od mat.) Rp 139.356.000,00 Rp 148.176.000,00 Rp 156.996.000,00
Total production needs Rp 169.344.000,00 Rp 182.574.000,00 Rp 195.804.000,00
Desired ending balance Rp 17.280.814.700,00 Rp 273.861.000,00 Rp 293.706.000,00
Total needs Rp 17.450.158.700,00 Rp 456.435.000,00 Rp 489.510.000,00
Beginning balance Rp 231.525.000,00 Rp 254.016.000,00 Rp 273.861.000,00

Purchases (units) Rp 17.218.633.700,00 Rp 202.419.000,00 Rp 215.649.000,00

Cost of purchases (IDR) Rp 17.218.633.700,00 Rp 202.419.000,00 Rp 215.649.000,00
Tabel 4 : Purchasing Budget
Labour Budget
A direct labour budget can also be prepared from data given in the production budget. The direct
labour hours to be spent depend on the units to be produced and the labour hours required per
unit of production.
Months
Jan Feb Mar
Units of A to be produced 1020 1170 1320
Units of B to be produced 2370 2520 2670
Total units 3390 3690 3990
Total hours at 1 hr. per unit 3390 3690 3990
Total labour cost Rp88.200 per hr Rp 298.998.000,00 Rp 325.458.000,00 Rp 351.918.000,00
Tabel 5 : Labour Budgeting

Cash Budget
Table 6 shows a cash budget for the PT ABC. Main source of the cash receipt sales, while cash
disbursements are for payment to creditors, cash expenditures, repayment of loans, capital
acquisitions, payment of dividends, etc. Generally, all firms maintain some minimum cash
balance to ensure liquidity.
Months
Jan Feb Mar
Begining cash balance Rp 17.640.000,00 Rp 192.276.000,00 Rp 205.711.800,00
add: Cash collection:
50% of sales Rp 297.675.000,00 Rp 324.135.000,00 Rp 350.595.000,00
Collections from debtors Rp 220.500.000,00 Rp 297.675.000,00 Rp 324.135.000,00
Total Cash receipts Rp 535.815.000,00 Rp 814.086.000,00 Rp 880.441.800,00
Less: Cash disbursement
Raw material purchases Rp 180.810.000,00 Rp 191.835.000,00 Rp 202.419.000,00
salaries Rp 22.050.000,00 Rp 22.050.000,00 Rp 22.050.000,00
wages Rp 298.998.000,00 Rp 325.458.000,00 Rp 351.918.000,00
sales commision Rp 29.767.500,00 Rp 32.413.500,00 Rp 35.059.500,00
Rent Rp 8.820.000,00 Rp 8.820.000,00 Rp 8.820.000,00
Miscellaneous Rp 5.953.500,00 Rp 6.482.700,00 Rp 7.011.900,00
Purcases of equipment Rp 22.050.000,00
Dividends Rp 44.100.000,00
Total cash disbursement Rp 546.399.000,00 Rp 609.109.200,00 Rp 627.278.400,00
cash surplus or deficit Rp 104.076.000,00 Rp 204.976.800,00 Rp 252.428.400,00
Minimum cash balance (ending) Rp 176.400.000,00 Rp 176.400.000,00 Rp 176.400.000,00
Borrowing (repayment) Rp 88.200.000,00 -Rp 44.100.000,00
Interest -Rp 661.500,00
Cash balance (ending) Rp 192.276.000,00 Rp 205.711.800,00 Rp 207.666.900,00

Tabel 6 : Cash Budget

Proforma Statement
The proforma financial statements can easily be prepared from the data accumulated in various
operating and financial budgets. The proforma income statement and balance sheet respectively
are shown in Tables 7 and 8.
Sales revenue Rp 1.944.810.000,00
Cost of goods sold:
Product A (3150 at Rp117.600) Rp 370.440.000,00
product B (7200 at Rp147.000) Rp 1.058.400.000,00 Rp 1.428.840.000,00
Gross profit Rp 515.970.000,00
Operating expenses:
Salaries Rp 66.150.000,00
Rent Rp 26.460.000,00
Sales commision Rp 97.240.500,00
Interest expenses Rp 1.323.000,00
Miscellanous Rp 19.448.100,00
Deprecoation Rp 79.380.000,00 Rp 290.001.600,00
Net profit Rp 225.968.400,00
Tabel 7 : Proforma Income Statement

Creditors Rp 215.649.000,00
Loan Rp 44.100.000,00
Interest payable Rp 661.500,00
Share capital Rp 4.280.787.000,00
Profit Rp 225.968.400,00
Rp 4.767.165.900,00
Cash Rp 207.666.900,00
Debtors Rp 350.595.000,00
Stock:
Raw material (19.980 at Rp14.700) Rp 293.706.000,00
Product A (1080 at Rp117.600) Rp 127.008.000,00
Product B (2160 at Rp147.000) Rp 317.520.000,00 Rp 738.234.000,00
Plant and machinery Rp 4.432.050.000,00
Less: Depreciation Rp 961.380.000,00 Rp 3.470.670.000,00
Rp 4.767.165.900,00
Tabel 8 : Proforma Balance Sheet