Badlands Incorporated manufactures a household fan that sells for $40 per unit. All sales are on account, with 40 percent of sales collected in the month of sale and 60 percent collected in the following month. The data that follow were extracted from the company's accounting records. • Badlands maintains a minimum cash balance of $60,000. Total payments in January 20x1 are budgeted at $462,500. • A schedule of cash collections for January and February of 20x1 revealed the following receipts for the period: From December 31 accounts receivable From January sales From February sales March 20x1 sales are expected to total 10,240 units. Cash Receipts January $ 252,000 188,000 February $264,000 228,800 Finished-goods inventories are maintained at 20 percent of the following month's sales. The December 31, 20x0, balance sheet revealed the following selected figures: cash, $75,000; accounts receivable, $252,000; and finished goods, $68,700. 1. Determine the number of units that Badlands sold in December 20x0. 2. Compute the sales revenue for March 20x1. units $ 409,600
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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