Moorcroft Company's budgeted sales and direct materials purchases are as follows: Budgeted Sales Budgeted D.M. Purchases $322,000 $50,000 289,000 365,000 April May June 52,000 66,000 Moorcroft's sales are 40% cash and 60% credit. Credit sales are collected 20% in the month of sale, 50% in the month following sale. and 26% in the second month following sale; 4% arkuncollectible. Moorcroft's purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month following the purchase and 60% in the second month following the purchase.
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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