Hagen Company's budgeted sales and direct materials purchases are as follows. Budgeted D.M. Purchases $60,000 70,000 80,000 January February March Budgeted Sales $300,000 330,000 350,000 Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase.
Hagen Company's budgeted sales and direct materials purchases are as follows. Budgeted D.M. Purchases $60,000 70,000 80,000 January February March Budgeted Sales $300,000 330,000 350,000 Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month of purchase, and 60% in the month following purchase.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
A8
Transcribed Image Text:Hagen Company's budgeted sales and direct materials purchases are as follows.
January
February
March
Budgeted Sales
$300,000
(a)
330,000
350,000
Hagen's sales are 40% cash and 60% credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and
36% in the second month following sale; 4% are uncollectible. Hagen's purchases are 50% cash and 50% on account. Purchases on
account are paid 40% in the month of purchase, and 60% in the month following purchase.
Budgeted D.M. Purchases
$60,000
70,000
Prepare a schedule of expected collections from customers for March.
March Cash Sales
HAGEN COMPANY
Expected Collections from Customers
Collection of March Credit Sales
80,000
Collection of February Credit Sales
Collection of January Credit Sales
Total Collections
March
27
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