Budgeting at New Co-Operative Society

CADM: Session 11: Budgeting @ New Co-operative

It is mid November 2017, and the manager of the New Co-operative Society has sought your help to set the budget for 2018. He had the figures for the nine months to September 30th, 2017, to which he had added his best estimates of the results for October, November and December.

The Co-operative purchased members' surplus maize between February and April each year, and held it in their store until the committee decided to sell, usually some time between August and October. No stocks were retained after the sale.

Apart from the manager and his secretary, the society employed a storekeeper, two labourers and an accounts clerk. During the harvest they would employ three or four casual labourers. The society did not own its own vehicles but hired private sub-contractors to collect members' crops from their farms at harvest time, and then to deliver the crops to the Market later in the year.

They rented their store from a local landowner, but they owned their own office building.

The society had no major plans for change in 2018. They hoped to conduct a membership drive and to recruit about 15 more members, increasing the numbers by 4%, and they hoped, as they always did, that members would grow and market more of their surplus through the society.

The manager realised that they would probably achieve a 5% increase in crop production per member, and he hoped that the improved storage procedure that they had adopted would reduce the storage losses from 5% to 3%. It was rumoured that the Government was going to increase the procurement price of maize during the harvesting season from the current price of Rs.20,000 to Rs.22,000 a tonne, which would not necessarily cover inflation which was running at 15% a year.

Salaries were likely to go up more than 10% while wages would increase by 15%.