Markham Company has completed its sales budget for the first quarter of Year 2. Projected credit sales for the first four months of the year are shown below: January $ 32,000 February $ 38,000 March $ 47,000 April $ 50,000 The company's past records show collection of credit sales as follows: 32% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be: Multiple Choice $47,000. $33,920. $44,120. $40,880. Huang Company reported the following information for the current year: Sales $ 860,000 Average operating assets $ 560,000 Margin 9 % The company's return on investment was: Multiple Choice 9.00%. 15.36%. 13.82%. Cannot be ascertained from the information provided.
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.
Markham Company has completed its sales budget for the first quarter of Year 2. Projected credit sales for the first four months of the year are shown below:
| January | $ | 32,000 | |
| February | $ | 38,000 | |
| March | $ | 47,000 | |
| April | $ | 50,000 | |
The company's past records show collection of credit sales as follows: 32% in the month of sale and the balance in the following month. The total cash collection from receivables in March is expected to be:
Multiple Choice
$47,000.
$33,920.
$44,120.
$40,880.
Huang Company reported the following information for the current year:
| Sales | $ | 860,000 | |
| Average operating assets | $ | 560,000 | |
| Margin | 9 | % | |
The company's return on investment was:
Multiple Choice
9.00%.
15.36%.
13.82%.
Cannot be ascertained from the information provided.
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