Drago makes all sales on account, subject to the following collection pattern: 40% are collected in the month of sale; 50% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for January, February, and March were $80,000, $120,000, and $180,000, respectively, what were the firm's budgeted collections for March? A. $72,000 B. $120,000 C. $174,000 D. $180,000 E. $140,000
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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