29 Questions
What is a budget?
A detailed quantitative plan for acquiring and using resources over a specific time period
What is the process of preparing a budget known as?
Budgeting
What is the purpose of using budgets to control an organization's activities?
To achieve financial objectives
What term describes the use of budgets to regulate and monitor an organization's actions?
Budgetary control
What is involved in the planning phase of budgeting?
Setting objectives and creating budgets
What does control involve in an organization?
Ensuring objectives are achieved through management steps
What is one of the advantages of budgeting mentioned in the text?
Coordinating activities
According to responsibility accounting, what should managers be held responsible for?
Only items they can control significantly
What is the typical period covered by operating budgets?
One year
What is a continuous budget?
Budget that rolls forward one month as the current month is completed
What is the purpose of dividing an annual budget into quarters?
To align with fiscal quarters
What is the total budgeted sales in dollars for the month of August?
$150,000
According to Royal’s collection pattern, what percentage of sales are uncollectible?
5%
What is the total cash collections expected for April, considering the collection pattern?
$70,000
How much will be collected in May from April's sales, according to the collection pattern?
$47,500
What is the total expected cash collections for the quarter ended June 30th, considering all sales from April to June?
$220,000
If $20,000 units are sold in April at $10 per unit, how much cash will be collected in May for these sales?
$150,000
What are the total cash disbursements for the quarter?
$185,000
If a company follows a no layoff policy and pays $15 (time-and-a-half) for every hour worked in excess of 1,500 hours per month, what would be the total direct labor cost for the quarter?
$64,500
What is the rate per hour paid to workers for direct labor at Royal?
$10
How many hours of work per week are employees paid for at Royal?
40 hours
If each unit of product requires 0.05 hours of direct labor, how many units can be produced with 1,500 hours of direct labor?
20,000 units
The direct labor budget depends on which of the following factors?
Labor hours guaranteed or required
What is the March 31 inventory used for in the direct materials budget calculation?
To calculate the materials to be purchased in May
How are materials payments typically split by Royal according to the text?
One-half in the month of purchase, one-half in the following month
What is the purpose of calculating expected cash disbursements for materials as mentioned in the text?
To anticipate and prepare for cash payments related to materials
How much is Royal paying per pound for its materials?
$0.40 per pound
Based on the information provided, how are materials purchases typically paid by Royal?
Half paid in advance, half paid in arrears
What calculation involves multiplying 140,000 lbs. by $0.40/lb as mentioned in the text?
Calculating expected cash disbursements for materials
Test your knowledge on budgeted sales and expected cash collections with this quiz. Questions cover topics such as calculating total budgeted sales in units and dollars, and understanding the collection pattern for sales on account.
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