Iguana, Inc, manufactures bamboo picture frames that sel for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month's sales. Ending direct materials inventory shoula be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March 280 Apr11 May June 260 31e 410 July August 385 435 Variable manufacturing overhead is incurred at a rate of S0.40 per unit produced. Annual foxed manufacturing overhead is estimated to be $7,800 ($650 per month) for expected production of 3.000 units for the year. Selling and administrative expenses are estimated at $700 per month plus $0.50 per unit sold. Iguana, Inc., had $10,900 cash on hand on April 1. Of its saies. 80 percent is in cash. Of the credit sales, 50 percent ts collected during the month of the sale, and 50 percent is collected during the month following the sele, Of direct materlals purchases. 80 percent is paid for during the month purchased and 20 percent is pald in the following month Direct materials purchases for March 1 totaled $2.500. Al other operating costs are peid during the month Incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During Apre, Iguana plans to pay $3.100 for a niece ofeguinment
Iguana, Inc, manufactures bamboo picture frames that sel for $30 each. Each frame requires 4 linear feet of bamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 40 percent of next month's sales. Ending direct materials inventory shoula be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March 280 Apr11 May June 260 31e 410 July August 385 435 Variable manufacturing overhead is incurred at a rate of S0.40 per unit produced. Annual foxed manufacturing overhead is estimated to be $7,800 ($650 per month) for expected production of 3.000 units for the year. Selling and administrative expenses are estimated at $700 per month plus $0.50 per unit sold. Iguana, Inc., had $10,900 cash on hand on April 1. Of its saies. 80 percent is in cash. Of the credit sales, 50 percent ts collected during the month of the sale, and 50 percent is collected during the month following the sele, Of direct materlals purchases. 80 percent is paid for during the month purchased and 20 percent is pald in the following month Direct materials purchases for March 1 totaled $2.500. Al other operating costs are peid during the month Incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During Apre, Iguana plans to pay $3.100 for a niece ofeguinment
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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.
Question
Budgeted cash payments. Would I begin with Cost of Direct materiasl purchase of April-3,010, May-3,650,June-4,015, 2nd Quarter -10,675?
Transcribed Image Text:Iguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet of bamboo,
which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 per hour.
Iguana has the following inventory policies:
Ending finished goods inventory should be 40 percent of next month's sales.
Ending direct materlals inventory should be 30 percent of next month's production.
Expected unit sales (frames) for the upcoming months follow:
March
280
Apri1
May
June
260
310
410
July
August
385
435
Variable manufacturing overhead is incurred at a rate of S0.40 per unit produced. Annual fixed manufacturing overhead is
estimated to be $7,800 ($650 per month) for expected production of 3.000 units for the year. Selling and administrative
expenses are estimated at $700 per month plus S0,50 per unit sold.
Iguana, Inc., had $10,900 cash on hand on April 1. Of its sales, 80 percent is in cash. Of the credit sales, 50 percent ts
collected during the month of the sale, and 50 percent is collected during the month following the sele,
Of direct materlals purchases, 80 percent is pald for during the month purchased and 20 percent is pald in the following
month. Direct materials purchases for March 1 totaled $2500. Al other operating costs are paid during the month
incurred. Monthly fixed manufacturing overhead includes $160 In depreciation. During April, Iguana plans to pay $3.100 for
a piece of equipment.
Transcribed Image Text:a plece of equipment.
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
balance
Complete this question by entering your answers in the tabs below.
Required 1
Required 2
Required 3
Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers
decimal places.)
April
May
June
2nd Quarter Total
Budgeted Cash Payments
0.00
< Required 1
Required 3 >
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