Question

Complete Iguana’s budgeted income statement for quarter 2

Requirea information The following information applies to the questions displayed below.) Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame r es 4 linear feet of bamboo, which costs $2.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $11 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 290 280 330 430 405 455 Variable manufacturing overhead is incurred at a rate of $0.60 per unit produced. Annual fixed manufacturing overhead is estimated to be $7.200 ($600 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 $11,100 cash on hand on April 1. or its sales, 80 percentis in cash of the credit sales. 50 percent is

Answer 1

Solution:

Compuatation of Unit Product Cost - Iguana Inc.
Particulars	Per Unit Cost
Direct Material (4*$2)	$8.00
Direct labor (0.5 * $11)	$5.50
Variable manufacturing overhead	$0.60
Fixed manufacturing overhead	$2.40
Unit Product Cost	$16.50

Budgeted Income Statement - Iguana Inc.
Particulars	April	May	June	2nd Quarter Total
Estimated Unit sales	280	330	430	1040
Budgeted Sales (Unit Sales * Selling price)	$7,000.00	$8,250.00	$10,750.00	$26,000.00
Budgeted Cost of goods Sold	$4,620.00	$5,445.00	$7,095.00	$17,160.00
Budgeted Gross Margin	$2,380.00	$2,805.00	$3,655.00	$8,840.00
Selling and Administrative Expenses:
Variable	$140.00	$165.00	$215.00	$520.00
Fixed	$700.00	$700.00	$700.00	$2,100.00
Budgeted Net Operating Income	$1,540.00	$1,940.00	$2,740.00	$6,220.00