Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12.00 per hour. Iguana has the following inventory policies: • Ending finished goods inventory should be 40 percent of next month's sales. • Ending raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March April 275 250 May 300 June 400 July August 375 425 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $650 per month plus $0.60 per unit sold. Iguana, Inc., had $10,800 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 raw materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Raw materials purchases for March 1 totaled $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $150 in depreciation. During April, Iguana plans to pay $3,000 for a piece of equipment. Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 lecimal places.) April May June Budgeted Cash Payments 2nd Quarter Total $ 0.00 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000.00 to maintain a $10,000.00 minimum cash balance. (Leave no cell blank enter "O" wherever required. Round your answers to 2 decimal places.) Beginning Cash Balance Plus: Budgeted Cash Receipts Less: Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed/Repaid Ending Cash Balance April May June 2nd Quarter Total $ 10,800.00 0.00 0.00

Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12.00 per hour. Iguana has the following inventory policies: • Ending finished goods inventory should be 40 percent of next month's sales. • Ending raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: March April 275 250 May 300 June 400 July August 375 425 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $650 per month plus $0.60 per unit sold. Iguana, Inc., had $10,800 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 raw materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Raw materials purchases for March 1 totaled $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $150 in depreciation. During April, Iguana plans to pay $3,000 for a piece of equipment. Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 lecimal places.) April May June Budgeted Cash Payments 2nd Quarter Total $ 0.00 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000.00 to maintain a $10,000.00 minimum cash balance. (Leave no cell blank enter "O" wherever required. Round your answers to 2 decimal places.) Beginning Cash Balance Plus: Budgeted Cash Receipts Less: Budgeted Cash Payments Preliminary Cash Balance Cash Borrowed/Repaid Ending Cash Balance April May June 2nd Quarter Total $ 10,800.00 0.00 0.00

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 26E: Ingles Corporation is a manufacturer of tables sold to schools, restaurants, hotels, and other...

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