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ACMA

FINAL PROJECT

Submitted to
Prof: Tariq Hussain
Submitted By
Mubashir Junaid
Khizer Munir

0008
0003

Nabeel Ulfat

DATE:26/2/2015

0015

Marble industry

Khan marble factory

Introduction of KMF
Khan marble factory is located in tehsil GujarKhan, gulyana morh near slater
house and university of central Punjab. The factory was established some
years ago. The total capital requirement for establishing such type of
business is Rs 10000000 to 15000000. And also includes the cost of
land.Faisal khan is the only person who deal with selling and is the part of
admin department.

Local market leadership in technical resources

High finishing and high quality production

Customization as per needs of the client

Customer Satisfaction and Timely Delivery

Vision
Our vision is to be a leading Global manufacturer and marketer of Stone,
Marble and Granite products. Our top quality products have adorned
buildings and projects throughout the Sultanate and abroad. Our reputation
has been built on quality in every step of the way.

Mission
Our mission is optimum utilizing of available human and natural resources
together with the use of state-of-the-art technology to provide distinctive
high quality products and services to our local and international customers to
meet their expectations.

Material
Direct material: marble slabs

The material which is required for making tiles is supplied by various cities
which includes swat, Mardan , Bunair, Karachi,balochistan etc.
One more type of stone is Taweera that is bought from balochistan.and as
well as flower is also type of stone.

Products
Sunny grey
Zebra grey
Sunny white

Main three types of sizes


11.5-11.5
4-11.5
5.75-11.5

SWOT analysis of KMF

Strength:
Quality material
Low cast
On time delivery
Products according to the customers design
No complaint from customers

Weakness:
Lack of proper setup
No proper accounting record

Opportunities:
Extension of business
Increasing demands
More investments
Tehsil as well district market capturing

Threats:

Bismillah marble factory


Load shedding problem
Water constraint
Increasing number of competitors

Labor force
There are 5 workers are working in Khan marble factory

Salary
10000 to 20000 approximately.

Machinery
The machinery which they are using is composed of three processes. First
the material is put into cutter machine then delivers to the resizer and at the
end of it is being sent to the polish machine.

Costing System:
Khan Marble Factory uses job order costing system. The job order costing of this company is as given
below:
Direct material
Marble Stone

Quantity
6 trucks
(24000 ft)

Unit cost
40

Total cost
960000

Direct Labor
Labor

Hours Used
8

Monthly rate
10000

Total
30000

FOH
Utility bills

Hours used
8

Monthly
25000

Total
25000

Total

1015000

Stones cost:
Sunny white
Sunny gray

= 40/ft
= 32/ft

Zabra

= 40/ft

Ziarat

= 90/ft

Monthly sale

4000 ft

Break-even Analysis
The break-even analysis establishes a relationship between operation costs
and revenues.
It indicates the level at which costs and revenue are in equilibrium. To this
end, the
break-even point of the project including cost of finance when it starts to
operate at full
capacity is estimated by using income statement projection.

Contribution Margin:
Contribution margin, or dollar contribution per unit, is the selling price per unit minus the variable
cost per unit. Contribution represents the portion of sales revenue that is not consumed by variable
costs and so contributes to the coverage of fixed costs

Sanny white
Contribution margin = selling price Variable cost
= 40 12

= 28
break even

= fixed cost / contribution margin


= 307500 / 28
= 10982 units

Sanny gray
Contribution margin = selling price Variable cost
= 32 12
= 20
Break even

= fixed cost / contribution margin


= 307500 / 20
= 15375 units

Zebra
Contribution margin = selling price Variable cost
= 55 12
= 43
Break even

= fixed cost / contribution margin


= 307500 / 43
= 7151 units

Ziarat

Contribution margin

= selling price Variable cost


= 90 12
= 78

Break even

= fixed cost / contribution margin


= 307500 / 78
= 3942 units

Master budget
The master budget is the aggregation of all lower-level budgets produced by a
company's various functional areas, and also includes budgeted financial statements, a
cash forecast, and a financing plan.

Master Budget of Khan Marble Factory (2 Years):

Schedule 1: Revenue Budget

Marble Tiles
Sunny White
Sunny Gray
Ziarat
Total

Units

Units

2015
12000
12000
12000

2016
12500
12000
12500

Schedule 2: Production budget

Selling
price
2015
40
32
90

Selling
price
2016
45
35
100

Total
revenue
2015
480000
384000
1080000
1908000

Total
revenue
2016
562500
420000
1250000
2232500

Budgeted sales
Target ending finish goods inventory
Total require units
Less beginning Finish goods inventory
Units of finish goods to produce

Marble Tiles
2015
48000 feet
30000 feet
78000 feet
10000 feet
68000 feet

Marble Tiles
2016
60000 feet
40000 feet
100000 feet
20000 feet
80000 feet

Schedule 3: of Material Used in Quantity and rupees


Physical units budget

2015

2016

Direct Material required


Total Material used
Cost Budget
12000*40

12000 feet
12000 feet
Rs.
480000

12500 feet
12500 feet
Rs.
500000

2015

2016

48000
30000
78000
10000
68000

60000
40000
100000
20000
80000

Direct Material purchase budget

Physical units Budget


To be used in production
Add target ending inventory
Total requirement
Deduct beginning inventory
Purchases to be made
Cost Budget
68000*40
80000x45
Purchases

2720000
3600000
2720000

3600000

Schedule 4: Direct Manufacturing labor cost budget

Output
unit
2015
Marble
Tiles
48000

2016

Monthly
Salary
(30000)
(40000)
2015
2016

60000

360000

480000

Schedule 5: Manufacturing overhead costs budget

Variable costs
Utilities
Maintenance
Fixed Costs
Depreciation
Total manufacturing overhead

2015

2016

300000
14000

400000
14500

50000
364000

50000
464500

Economic Order Quantity EOQ:


The economic order quantity (EOQ) is a decision model that, under a given of assumptions, calculate the
optimal quantity of inventory to order.

2 DS
H
Q=

Q=optimal order quantity


D=annual demand
S=ordering or setup cost
H=holding cost

Q=

2 ( 48000 ) (0.36)
1

34560

=186 units

Number of orders per year:


D
= EOQ
48000
= 186
Details
sales

2015
1920000

Direct
Materials
Labor payroll

900000

FOH

360000

420000

2016
201000
0
105000
0
500000

2017
21800
00
11700
00
55000
0
415000 49000
0

2018
2230000

2019
2450000

1290000

1450000

600000

660000

530000

580000

D
Number of working days

48000
365

=132 feet

Overall Budget

=
258
Demand
each
working
day:
=

Problems

Lack of proper machinery to produce quality production.


Lack of awareness and facilities.
Untrained workers.
Non existence of quality control prices.
Poor Raw material supply.
Lack of distribution channels.
Ineffective market strategies.

Future Projections
It is forecasted that the production of marble increases with a compounded
annual growth rate of about 8% per annum.
Years
2010
2015
2020
2025

Production in Tons (000)


138750
206240
306500
455000

In Pakistan, this sector has a long term potential, which is ensured by large
local reserves, and a growing global market. The expert estimates that the
countrys export of marble, which is presently $7million, can be increased to
$40 million within 3 years.

Conclusion:
This sector needed to be organized on modern lines. The induction of modern
technology in this sector will increase efficiency of processing units.
Improving the standard can only increase the demand of Pakistani products
in international market.
This sector has great potential to contribute to the national economic growth
and for the generation of employment mostly in the rural areas. This sector
also needs to be organized scientifically with a consistent follow-up by the
ministry of industries and production to achieve the export target of $500
Million.

Recommendations

Government should make a policy.


They provide licenses to the firms, discovering marble reserves in
previously un explored areas.
Private sector should be motivated by giving incentives, security, etc
for making Investments.
Technology should be upgraded.
The sector needs better marketing compaign.

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