Sales volume for the year 2017 has been estimated for Queennie Apparels as follows: Products Quarters Shirts Dresses Pants First 18,000 32,000 46,000 Second 21,000 35,000 49,000 Third 24,000 31,000 43,000 Fourth 20,000 29,000 40,000 Total 83,000 127,000 178,000 Selling prices for these products are: Shirts – P65; Dresses – P100; Pants – P180. An estimated 5% of sales is expected for sales returns and allowances. 80% of sales are on account and 20% is cash sales. 75% of credit sales is collected in the same quarter of the sale while 25% is collected in the following quarter. Required: Prepare a sales budget for the year 2017 with a schedule of expected cash collections.
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.
Sales volume for the year 2017 has been estimated for Queennie Apparels as follows:
Products
Quarters
Shirts
Dresses
Pants
First
18,000
32,000
46,000
Second
21,000
35,000
49,000
Third
24,000
31,000
43,000
Fourth
20,000
29,000
40,000
Total
83,000
127,000
178,000
Selling prices for these products are: Shirts – P65; Dresses – P100; Pants – P180. An estimated 5% of sales is expected for sales returns and allowances. 80% of sales are on account and 20% is cash sales. 75% of credit sales is collected in the same quarter of the sale while 25% is collected in the following quarter.
Required:
Prepare a sales budget for the year 2017 with a schedule of expected cash collections.
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