Budgeting for Organic Farm Products

Budgeting
Name of the student-
[DATE]
Hewlett-Packard
[Company address]

Table of Contents
1. Create product or service your choice, and discuss the vision, purpose, and goal of your
activity...........................................................................................................................2
2. Estimate standard direct material and direct labour costs for your product or service.........3
3. Estimate standard variable overheads and fixed overheads for producing the product or
service............................................................................................................................6
4. Prepare master budget for your 1 month of operation (including sales, costs of sales, profit
and loss budgets).............................................................................................................9
5. Reflection on knowledge and skills.............................................................................12
References....................................................................................................................13

1. Create product or service your choice, and discuss the vision, purpose, and goal of
your activity.
 PRODUCT OR SERVICE: The product chosen for offering into the market is organic farm
products. The primary product shall be far produced fruits, mainly the citrus ones. The setting
proposed for the production shall be mainly traditional with the use of labour intensive
technique (Garibaldi, et. al 2017). The land chosen shall be feasibly tested initially to check
the suitability for the proposed production. The production month shall be based upon the
months suitable for each fruit type, in order to promote production function happening on a
continuous basis.
 REASON: the reason for the selected products is the ongoing demand in the market for the
healthy produce rather than chemically grown items. The opportunity to strike market share is
high in this category of product (Reganold, & Wachter, 2016).
 VISION: the vision of business is promotion of a system of agricultural supply that is safe
and sustainable. Promoting the health of the consumers along with environment protection
(Niggli, Willer, & Baker, 2016).
 PURPOSE: the purpose of business is provision of good quality, and full of nutrition fruits
for making it available for consumption to several regions of Australia. The main purpose is
attainment of sustainability (Barker, 2016).
 GOAL: the goal is to strike a balance with consumers to incentivise them to make purchase
decision that can improvise their health. Along with consumer health, the environment and
community care is also to be sought of. The target is expansion of use of practice of organic
farming and reduction of chemically grown food products. The sustainability of the
Australian agricultural system is aimed to be fostered (Crowder, & Reganold, 2015).

The futuristic goal is to bring an entire reform in the manner production is done and
materialised. Knowledge about the environmental and health benefits of the system of
organic farming is required to be spread in the local masses.
 LINKAGE OF DECISION: the decision to produce the organic fruits has been taken with
the view to exploit the growing demand in market for healthy produce. The company’s
vision, purpose and goal are linked with exploiting this opportunity. The company’s foremost
aim is creating a sustainable environment for the company’s production process. This
sustainability can be achieved by promoting organic production as well as the promotion of
the organic sales.
2. Estimate standard direct material and direct labour costs for your product or service.
The direct material costs required for the production of agricultural farm business shall relate
to seeds, and irrigation, with manure. The direct labour shall comprise of the labor costs. The
current production list comprises of oranges, and lemon. The process of cost estimation is
done as follows:
NOTE: the calculation of labor and material cost is done on an annual basis. Assumption
taken is that, both lemon and oranges shall be grown simultaneously on 200 acre land. The
production shall take 12 months for realise in sale. Hence, the master budget prepared shall
be for the month after the production is done (Gao, & Wong, 2017).
DETAILS
particulars