## Question 29**Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 8,000 pizzas at $12 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of budgeted sales revenue for its first quarter.**### Steps to Calculate Budgeted Sales Revenue:1. **Calculate Monthly Sales**: - Number of pizzas per month: 8,000 - Price per pizza: $12 Monthly Sales Revenue = 8,000 pizzas * $12/pizza = $96,0002. **Calculate Quarterly Sales**: - There are 3 months in a quarter: Quarterly Sales Revenue = $96,000/month * 3 months = $288,0003. **Calculate Collections**: - 95% of sales are collected in the sale month. - 5% of sales are collected in the following month. For each month: - **Month 1**: - Collected in Month 1: 95% of $96,000 = $91,200 - Collected in Month 2: 5% of $96,000 = $4,800 - **Month 2**: - Collected in Month 2 (from Month 2 sales): 95% of $96,000 = $91,200 - Collected in Month 3: 5% of $96,000 = $4,800 - **Month 3**: - Collected in Month 3 (from Month 3 sales): 95% of $96,000 = $91,200 - Collected in Month 4: 5% of $96,000 = $4,8004. **Total Collections for the Quarter**: - Month 1: $91,200 - Month 2: $91,200 (current month) + $4,800 (previous month) = $96,000 - Month 3: $91,200 (current month) + $4,800 (previous month) = $96,000 Total Collections = $91,200 + $96,000 + $96,000 = $283,200Thus,

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Budgets are the estimates or forecasts that are made for future period of time. Budgeted sales means…

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QUESTION 29 Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 8,000 pizzas at $12 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of budgeted sales revenue for its first quarter.

QUESTION 29 Pasta Disasta, Inc. is preparing its master budget for its first quarter of business. It expects to sell 8,000 pizzas at $12 per pizza per month. It expects to collect 95% of the sales in the month of the sale and 5% in the following month. Calculate the amount of budgeted sales revenue for its first quarter.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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