Expected unit sales (frames) for the upcoming months follow: March April 295 290 May 340 June 440 July 415 465 August Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $800 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400 for a piece of equipment. PA8-3 (Algo) Preparing Cash Budget [LO 8-4] Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $11,000 minimum c. balance. No interest is charged if the loan is paid off by the end of the next quarter.
Expected unit sales (frames) for the upcoming months follow: March April 295 290 May 340 June 440 July 415 465 August Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $800 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent is collected during the month of the sale, and 50 percent is collected during the month following the sale. Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400 for a piece of equipment. PA8-3 (Algo) Preparing Cash Budget [LO 8-4] Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $11,000 minimum c. balance. No interest is charged if the loan is paid off by the end of the next quarter.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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![Expected unit sales (frames) for the upcoming months follow:
March
April
May
June
July
August
295
290
340
440
415
465
Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is
estimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrative
expenses are estimated at $800 per month plus $0.50 per unit sold.
Iguana, Incorporated, had $11,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50
percent is collected during the month of the sale, and 50 percent is collected during the month following the sale.
Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following
month. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the month
incurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400
for a piece of equipment.
PA8-3 (Algo) Preparing Cash Budget [LO 8-4]
Required:
1. Compute the budgeted cash receipts for Iguana.
2. Compute the budgeted cash payments for Iguana.
3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $11,000 minimum cash
balance. No interest is charged if the loan is paid off by the end of the next quarter.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F15d12116-2bcb-4fc9-8503-260377d5dc84%2F59c76a2d-3823-4099-ab2e-7f733e249f26%2Fgrn8pb_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Expected unit sales (frames) for the upcoming months follow:
March
April
May
June
July
August
295
290
340
440
415
465
Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is
estimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrative
expenses are estimated at $800 per month plus $0.50 per unit sold.
Iguana, Incorporated, had $11,800 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50
percent is collected during the month of the sale, and 50 percent is collected during the month following the sale.
Of direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following
month. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the month
incurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400
for a piece of equipment.
PA8-3 (Algo) Preparing Cash Budget [LO 8-4]
Required:
1. Compute the budgeted cash receipts for Iguana.
2. Compute the budgeted cash payments for Iguana.
3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $11,000 minimum cash
balance. No interest is charged if the loan is paid off by the end of the next quarter.
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