ABC Company's budgeted sales for June, July, and August are 14,200, 18,200, and 16,200 units respectively. The selling price for each unit is $15. Based on past experience, ABC expects that 40% of a month's sales will be collected in the month of sale, 55% in the following month, and 2% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August. Budgeted sales units Unit selling price Budgeted sales revenue August collections: Current month's sales Prior month's sales Second prior month's sales Total collections June July August
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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