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An introductory presentation to introduce Planning at Cost center level.Importance of Planning and BudgetingImportance of Cost Center PlanningWeightage of Conversion Costs and Operating Expenses.
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International Textile Limited – Information Systems
Cost Planning & BudgetingManagement Meeting
November 18, 2015
Objective
International Textile Limited – Information Systems 2
Cost Planning
Monitoring Actuals
Variance Reporting
Preventive Measures
Cost Reduction
Classification of Expenditure
International Textile Limited – Information Systems 3
Expenditure
Capital Expenditure
Upgrade Costs
Expansion
New Investment
Revenue Expenditure
BOM Related
Conversion Costs & Operating
Expenses
B A L A N C E S H E E
T
P R O F I T & L O S S
Historical Trend of Last 3 Months
International Textile Limited – Information Systems 4
Cost Element July 2015 Aug 2015 Sep 2015
BOM Related Costs 220 377 434
Conversion Costs & Operating Expenses 193 174 185
Total Cost for the Period 413 551 619
Conversion & Operating Cost as a % of Total Cost
47 % 32 % 30 %
Cost of Manpower 93 70 76Manpower Cost Proportion 48 % 40 % 41 %
Other Costs Proportion 52 % 60 % 59 %
------------ Figures in Millions PKR --------------
Way forward
International Textile Limited – Information Systems 5
Mapping in SAP
International Textile Limited – Information Systems 6
Department
Cost Cente
r
Expense
Head
Cost Elements
Cost Center
Cost Element
Conversion &
Operating Costs
Cost Center Structure
International Textile Limited – Information Systems 7
International textile Ltd
Operations
Terry Textile
Sizing
Weaving
Processing
CMT
Garments MJS Terry Trading
Services
Export Finance & Costing
Information Systems
SAP
Networks
Internal Audit
Cost Center Structure in SAP
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SAP T-CODEOKENN
Cost Element Structure
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SAP T-CODE: S_ALR_87013611
Future Action Points
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Plan
Actual
Monthly Meeting of all HODs
Review of Costs & Variance Analysis
Last Date to Submit Cost Center Plans = November 30, 2015
Planning & Budgeting Techniques
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Budgets
Fixed Budgets
Rolling Budgets
Incremental Budgets
Zero Based Budgets
Time Frame
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Cost Center Planning Templates to be filled by:
November 30, 2015
Templates to be provided to Costing Department
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