Subject : Accounting JuneJulyAugust440415465Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead isestimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrativeexpenses 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, 50percent 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 followingmonth. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the monthincurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400for a piece of equipment.Required:Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June).1. Budgeted Sales Revenue2. Budgeted Production in Units3. Budgeted Cost of Direct Material Purchases4. Budgeted Direct Labor Cost5. Budgeted Manufacturing Overhead6.Budgeted Cost of Goods Sold7. Total Budgeted Selling and Administrative ExpenseAprilMayJune2nd QuarterTotal Required information[The following information applies to the questions displayed below]Iguana, Incorporated, manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear feet ofbamboo, which costs $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $14per hour. Iguana has the following inventory policies:• Ending finished goods inventory should be 40 percent of next month's sales.• Ending direct materials inventory should be 30 percent of next month's production.Expected unit sales (frames) for the upcoming months follow:MarchAprilMayJuneJulyAugust295290340440415465Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead isestimated to be $9,000 ($750 per month) for expected production of 5,000 units for the year. Selling and administrativeexpenses 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, 50percent 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 followingmonth. Direct materials purchases for March 1 totaled $2,600. All other operating costs are paid during the morthincurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400for a piece of equipment.

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Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases April May June 2nd Quarter Total

Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases April May June 2nd Quarter Total

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

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

Subject : Accounting

June
July
August
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.
Required:
Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June).
1. Budgeted Sales Revenue
2. Budgeted Production in Units
3. Budgeted Cost of Direct Material Purchases
4. Budgeted Direct Labor Cost
5. Budgeted Manufacturing Overhead
6.
Budgeted Cost of Goods Sold
7. Total Budgeted Selling and Administrative Expense
April
May
June
2nd Quarter
Total

Required information
[The following information applies to the questions displayed below]
Iguana, Incorporated, 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 $14
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 should be 30 percent of next month's production.
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 morth
incurred. Monthly fixed manufacturing overhead includes $190 in depreciation. During April, Iguana plans to pay $3,400
for a piece of equipment.

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Step 2: Preparation of Budgeted Sales Revenue:-

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Step 3: Preparation of Budgeted Production in units:-

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Step 4: Preparation of Budgeted Cost of Direct Material purchased:-

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