Budget Drill # 10 Foster Company budgeted its January sales to be 10,000 units of its interactive watches. Because of an aggressive marketing campaign, Foster expects sales to increase by 10% each month. The selling price is $20 each. Based on past experience, all sales will be on account. 50% of the sales will be collected in the same month as the sale, 30% are collected one month later and 20% are collected two months later. Assuming the month of January began with no account receivable balance, what is the budgeted account receivable balance for the end of January?
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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