Copdog David Inc. is presently preparing their budget for the 1st quarter. The marketing department has projected sales, in units, for the coming 4 months: January 3,000 February 2,500 March 4,200 April 2,400 The selling price per unit is $16 each. All sales are on account and, based on historical data, the company has the following accounts receivable payment experience: Percentage paid in the month of sale 40% Percentage paid in the month after sale 55% Percent lost to uncollectible accounts 5% Company policy requires that ending inventories for each month be 20% of next month’s sales. a) Prepare a sales budget for February and March and provide total sales revenue. Feb: March: b) Prepare a schedule showing the cash expected in payments on accounts receivable in February and March. Feb: March: c) Prepare a production budget for February and March and provide the total units to produce. Feb: March:
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.
Copdog
David Inc. is presently preparing their budget for the 1st quarter. The marketing department has projected sales, in units, for the coming 4 months:
January 3,000
February 2,500
March 4,200
April 2,400
The selling price per unit is $16 each. All sales are on account and, based on historical data, the company has the following
Percentage paid in the month of sale 40% Percentage paid in the month after sale 55% Percent lost to uncollectible accounts 5%
Company policy requires that ending inventories for each month be 20% of next month’s sales.
a) Prepare a sales budget for February and March and provide total sales revenue.
Feb:
March:
b) Prepare a schedule showing the cash expected in payments on accounts receivable in February and March.
Feb:
March:
c) Prepare a production budget for February and March and provide the total units to produce.
Feb:
March:
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