Bioenergy plays a significant role in the green transition. In this work, the conversion of methanol and mutton bone fat oil (as a low-cost feedstock) for bioenergy production was studied. The five-level, three-factor response surface methodology (RSM) was used to optimize the transesterification reaction conditions for produced biodiesel. Twenty ultrasonic-assisted experiments at the frequency of 25 kHz were conducted to investigate the effects of methanol/oil molar ratio (M/O) and concentrations of KOH and NaOH as catalysts on biodiesel yield. A second-order polynomial equation was developed by fitting the RSM experimental data using Design-Expert software. Results showed that the optimum biodiesel yield of 90.087% could be achieved by the KOH catalyst with 2.5 wt% concentration and 15:1 M/O during 3 h of the reaction. Furthermore, the biofuel analyses showed that methanol and mutton bone fat oil can be used as a proper feedstock for biofuel production. In the following, a membrane filtration package system is proposed and modeled. The reaction kinetics was determined based on experimental data. The results of the mathematical modeling showed the reaction time appears to be 6 times shorter in a membrane setup (30 min). Consequently, membrane application is highly recommended for biodiesel production from mutton bone fat oil.