A sales budget is a detailed schedule showing the expected sales for the budget period. Typically, it is expressed in both rupees and units of production. An accurate sales budget is the key to the entire budgeting in some way. If the sales budget is sloppily done then the rest of thebudgeting process is largely a waste of time.
The sales budget will help determine how many units will have to be produced. Thus, the production budget is prepared after the sales budget. The production budget in turn is used to determine the budgets for manufacturing costs including the direct materials budget, the direct labor budget, and the manufacturing overhead budget. These budgets are then combined with data from the sales budget and the selling and administrative expenses budget to determine thecash budget. In essence, the sales budget triggers a chain reaction that leads to the development of the other budgets. The selling and administrative expenses budget is both dependent on and a determinant of the sales budget. This reciprocal relationship arises because sales will in part be determined by the funds committed for advertising and sales promotion.
The sales budget is the starting point in preparing the master budget. All other items in the master budget including production, purchase, inventories, and expenses, depend on it in some way. The sales budget is constructed by multiplying the budgeted sales in units by the selling price.
The primary purpose of having a sales budget is to effectively and accurately determine the number of units that will need to be produced. Units can be used to refer to a physical product, or service. Having an accurate sales budget is a key because if it uses imprecise figures, it will throw off the production budget and budget for manufacturing costs. The production budget follows the sales budget while the budget for manufacturing costs follows the production budget. The budget for manufacturing costs includes expenses such as direct materials, labor and manufacturing overhead. All of these data combined make up the cash budget. All the budgets are interrelated, and begin with the sales budget.
The sales budget should work out on a sound and reasonably detailed manner. It should reflect seasonal influences and any anticipated irregularities in sale. It should be broken down not only into time periods but also into geographical or responsible areas by the use of sales quotas. A well-developed sales plan is general built up on the quota basis in the first place. In multiple situations, there is a choice of manufacturing product items in more than one plant, the geographical distribution of sales are for special importance for production planning. Adequate sales planning is a basic fundamental of a profit planning program.
The sales plan is the foundation of the firm for periodic planning because practically all other enterprise planning is built around it. The primary source for cash is sales, the need of capital addition, the plan of expenses, the manpower requirement, the production level and other important operational aspect depend on volume of sales. A comprehends sales plan includes two separate but related plans i.e. strategic and tactical sales plans. A comprehensive sales plan incorporated such management decisions as objectives, goals, strategies and premises. Both long-term and short term plans must be developed in harmony with comprehensive profit plan.
1.1 Hydropower Development in Nepal
Nepal entered into hydropower development field almost a century ago. The first in thisregion was the construction of 500KW Pharping hydropower project, commissioned in1911 AD followed by Morang Hydro 1918 and Sundarijal Hydro in late thirties. Theplanned development approach was initiated in late fifties with the First Five Year Plan.In about a century only 450MW has been developed through government agency. On theother hand after...