PROJECT BUDGETING

In this part, the cost production for the entire project is estimated in the given tables below. Most of the
cost stated is estimated form the price stated in the Malaysian market. It is essential to make a production
cost budgeting to estimate overall cost assumption for the project.

The budgeting is planned using the top-down method budgeting. Top-down budgets are those broad,
loosely supported financial projections used by senior management to set the financial goals of the
organization. According to Quentin Fleming in Cost/Schedule Control Systems Criteria , “… top-down
budgets should be subsequently reinforced by more detailed bottom-up financial estimates, which would
serve to verify that the gross plans of management can be met.” Topdown budgeting approaches can be
used successfully to form ballpark estimates of the entire development process, which gives management
solid information for strategic decisions. That is, as long as such estimates are not cast in concrete. And
top-down budgets can even act as limitations, such as “this is the most we are willing to spend on this
project.” In those cases, the bottom-up estimate must fit comfortably—well within the limits of the top-
down budget.

All the cost is purely stated without any cost constraint and is based on the production 300 macarons with
3 different flavors. To calculate the net worth, we use Net Present Value (NPV) calculating. The discount
rate is 9% and the outflow of the first month is RM 34429.08 which the total of initial investment,
expenditure and employee’s salary. For the following months, the outflow is RM 23029.08 which is consist
of employee’s salary and expenditure of every month. The first inflow for our sales is RM31500 based on
the price of our macarons which is RM3.50 per pcs and we sell it 300 pcs a day for 30 days. The incoming
months of our inflow sales is increase by 9% based of our sale growth.
RAW MATERIAL

No Material Price per kg Quantity Quantity Total cost

(RM) (100 pcs)(g) (600pcs) (g) (RM)
(per month)
(600pcs X 30
days)
Meringue:
1 Egg 0.38 (per egg) 4 eggs 16 eggs 182.40
2 Fine sugar 2.95 57 342 30.27
3 Almond flour 15 125 750 337.50
4 Food coloring 2.10(25 ml) 3 ml 18 ml 45.36
agent
5 salt 1.40 5 30 1.40
6 Confectioner 5.00 380 2280 342.00
sugar
Filling :
7 Unsalted butter 39.00 188 1128 50.00
8 Vanilla extract 40.00(1L) 11 ml 66 ml 80.00
9 Milk 6.99 (1L) 20 ml 120 ml 25
10 Nutella 20.11(600g) 156 936 941.15
11 Oreo 24 125 750 540
12 Cream cheese 45 70 420 567
13 Granulated 3.00 70 420 37.00
sugar
Packaging:
14 Boxes 3.50/1 box - 50 5250
Total: 8429.08

EXPENDITURE

No Type Cost per Month (RM)

1 Store Rental 1000.00
2 Raw Material 8429.08
3 Promotion 200.00
4 Utilities 500.00
5 Delivery 200.00
Total: 10329.08
INITIAL INVESTMENT

No Type Price per unit Quantity Total price

1 Machine:
Mixer 359 2 718
Oven 2700 2 5400
Weighing scale 72 1 72
Food chiller 2000 1 2000
2 Apparatus:
Tray 10 8 80
Piping 10 8 80
Utensil 50/set 1 set 50
3 Interior design 3000
Total 11400

EMPLOYEE’S SALARY

No. Employee Salary / month Quantity Total (RM)

1 CEO 2500 1 2500.00
2 Project Manager 2200 1 2200.00
3 Finance Manager 2000 1 2000.00
4 Marketing Manager 2000 1 2000.00
5 Operation Manager 2000 1 2000.00
6 Staff 1000 2 2000.00
Total: 12700.00

Outflow for first month = Initial investment + Expenditure + Employee’s salary

=RM 11400 + RM 10329.08 + RM 12700

=RM 34429.08

SOURCES OF RESOURCES

No Types of resources Prices (RM)

1 Loan by MARA 25000.00
2 Own resources 2000 x 5 person = 10000
Total 35000.00
Net Present Value (NPV)
Discount rate,K value = 9%

Growth sale = 9 %

Outflow for first month = Expenditure + initial investment+ employee’s salary

= RM 34429.08

Inflow for first month = prices of macarons of 300 pieces a day for 30 days

= RM3.50x300x30

=RM31500

inflow outflow netflow discount

month (RM) (RM) (RM) rate net present value (RM)
0 0 34429.08 -34429.08 1 -34429.08
1 31500 0 31500 0.917431193 28899.08257
2 34335 23029.08 11305.92 0.841679993 9515.966669
3 37425.15 23029.08 14396.07 0.77218348 11116.40743
4 40793.41 23029.08 17764.33 0.708425211 12584.69923
5 44464.82 23029.08 21435.74 0.649931386 13931.76021
6 48466.65 23029.08 25437.57 0.596267327 15167.59187
7 52828.65 23029.08 29799.57 0.547034245 16301.38527
8 57583.23 23029.08 34554.15 0.50186628 17341.56271
9 62765.72 23029.08 39736.64 0.46042778 18295.85292
10 68414.63 23029.08 45385.55 0.422410807 19171.3468
11 74571.95 23029.08 51542.87 0.38753285 19974.55533
12 81283.43 23029.08 58254.35 0.355534725 20711.44431
TOTAL 168582.5753

The total NPV value of one year is positive which is RM 168582.5753

COMPANY SERVICES PROVIDED
Checkers Hypermarket Sdn.Bhd Supply raw material
7, Jalan Persiaran Selangor,
Seksyen 15, 40200
Shah Alam, Selangor
Harvest Bakery Ingredients Sdn.Bhd. Supply filling material
Lot 23, Jalan U5/15
Section U5, 40150 Shah Alam
Selangor Darul Ehsan, Malaysia
Packaging Mart, Jaya One Supply packaging
100-P2-023, Jaya One, The School,
72A, Jalan Universiti,, Jaya One, 46200
Petaling Jaya, Selangor
Print Expert Advertising the product
20, Jalan Bunga Tanjung 2/16, Seksyen 2, 40000
Shah Alam, Selangor
Murni Machinery Sdn.Bhd Supply machine and it’s component
No. 14-2, Jalan Kuchai Maju 10,
Kuchai Entrepreneurs Park,
Jalan Kuchai 58200
Kuala Lumpur
JOB DESCRIPTION

NAMES AND POSITION JOB DESCRIPTION

CEO  Manage the company and staff
 Provide a successful leadership and
management of the organization
according to the strategic direction set by
the Board of Directors
 Oversees the work of other staff
PROJECT MANAGER  Creates and executes project work plans
and revises as appropriate to meet
changing needs and requirements
 Manages day-to-day operational aspects
of a project and scope.
 Plan and schedule project timeline.
 Facilitate the definition of project scope,
goals and deliverables
 Implement and manage project changes
and interventions to achieve project
outputs
 Strong organizational, presentation, and
customer services skills
 Create strategies for risk mitigation and
contingency planning
 Identifies and manage resources needed
and assigns responsibilities for project
implementation.
 Present reports defining project progress,
problems and solutions
 Plan and schedule project timeline
 Constantly monitor and report on
progress of the project to all stakeholders
 Ensures project document are complete,
current, and stored appropriately
FINANCE MANAGER  Record financial transactions on
computer systems
 Produce financial forecast
 Deals with payroll, invoices, and
expenses
 Carry out financial audits
 Create monthly, quarterly and annual
budget reports
 Must overcome the financial problem if
appears
 Formulating strategic and long term
business plans
OPERATION MANAGER  Ensuring that communication between
department is ongoing and utilized to
maintain an environment of continuous
improvement
 Support the company in production
planning and making sure the business is
adequately resourced
 Training of staff and managers to ensure
that everyone is performing adequately
in their role
 Providing a leadership support function
to teams and motivating staff to achieve
production goals
 Ensuring key performance indicators are
in place and production targets are met
 Implementation of any new policies and
procedures relating to the production
progress.
MARKETING MANAGER  Research and analyze market trends
 Identify target markets and how to reach
them
 Create marketing and social media
strategies
 Plan campaign and managing budgets
 Meeting clients and attending events like
trade shows
 Monitor the effectiveness of campaigns