Best Breath is a retail store selling home oxygen equipment. Best Breath also services home oxygen equipment, for which the company bills customers monthly. Best Breath has budgeted for increases in service revenue of $100 each month due to a recent advertising campaign. The forecast of sales and service revenue for March-June 2018 is as follows: Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into Best Breath's account overnight. For the servicing of home oxygen equipment, 75% of oxygen services billed each month is collected in the month of the service, and 25% is collected in the month following the service.
Best Breath is a retail store selling home oxygen equipment. Best Breath also services home oxygen equipment, for which the company bills customers monthly. Best Breath has budgeted for increases in service revenue of $100 each month due to a recent advertising campaign. The forecast of sales and service revenue for March-June 2018 is as follows: Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into Best Breath's account overnight. For the servicing of home oxygen equipment, 75% of oxygen services billed each month is collected in the month of the service, and 25% is collected in the month following the service.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter9: Cost Accounting For Service Businesses, The Balanced Scorecard, And Quality Costs
Section: Chapter Questions
Problem 3E: Prepare a revenue budget for the year ending December 31, 2016.
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Best Breath is a retail store selling home oxygen equipment.
Best Breath also services home oxygen equipment, for which the company bills customers monthly. Best Breath has budgeted for increases in service revenue of $100 each month due to a recent advertising campaign. The forecast of sales and service revenue for March-June 2018 is as follows:
Almost all of the sales revenues of the oxygen equipment are credit card sales; cash sales are negligible. The credit card company deposits 97% of the revenues recorded each day into Best Breath's account overnight. For the servicing of home oxygen equipment, 75% of oxygen services billed each month is collected in the month of the service, and 25% is collected in the month following the service.
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