Rhody Co. makes bracelets. The company's sales budget for the first six months is given below: Q1 Q2 January February March April May June 50,000 100,000 200,000 200,000 400,000 300,000 From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 50% are collected in the month following sale, and the remaining 25 % are collected in the second month following sale. Bad debts are negliable and can be ignored. How much does this company expect to collect in his second quarter?
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.
Rhody Co. makes bracelets. The company's sales budget for the first six months is given below:
| Q1 | Q2 | ||||
| January | February | March | April | May | June |
| 50,000 | 100,000 | 200,000 | 200,000 | 400,000 | 300,000 |
From past experience, the company has learned that 25% of a month's sales are collected in the month of sale, another 50% are collected in the month following sale, and the remaining 25 % are collected in the second month following sale.
How much does this company expect to collect in his second quarter?
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