iguana, inc. Manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo. Which cost $2.00 per foot . Each frame takes approximately 30 minuets to build, and the labor rate averages $13 per hour. Iguana has the following inventory policies.
Ending finished goods inventory should be 40 percent of the next month's of sales
Ending raw materials inventory should be 30 percent of next month;s productions.
Expected unit sales (frames ) for the upcoming months follow:
March | 310 |
April | 320 |
May | 370 |
June | 470 |
July | 445 |
August | 495 |
Variable manufacturing overhead is incurred at a rate of $0.50 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,800 ($400 per month) for expected production of 4,800 units for the year. Selling and administrative expenses are estimated at $500 per month plus $0.50 per unit sold.
Iguana. Inc. had $10,500 cash on hand on April 1st, Of its Sales , 80 percent is in Cash. Of 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 1st totaled $2,200. All other operating cost are paid during the month incurred. Monthly fixed manufacturing overhead includes $220 in depreciation. During April, Iguana plans to pay$3,700 for a piece of equipment.
Solution:
Computation of Unit Product Cost - Iguana Inc. | |
Particulars | Per Unit Cost |
Direct Material (4*$2) | $8.00 |
Direct labor (0.5 * $13) | $6.50 |
Variable manufacturing overhead | $0.50 |
Fixed manufacturing overhead ($4800 /4800) | $1.00 |
Unit Product Cost | $16.00 |
Budgeted Income Statement - Iguana Inc. | ||||
Particulars | April | May | June | 2nd Quarter Total |
Budgeted Sales Revenue (Unit Sales *$25) | $8,000.00 | $9,250.00 | $11,750.00 | $29,000.00 |
Budgeted Cost of goods Sold (Units sales*$16) | $5,120.00 | $5,920.00 | $7,520.00 | $18,560.00 |
Budgeted Gross Margin | $2,880.00 | $3,330.00 | $4,230.00 | $10,440.00 |
Selling and Administrative Expenses: | ||||
Variable ($0.50 per unit) | $160.00 | $185.00 | $235.00 | $580.00 |
Fixed | $500.00 | $500.00 | $500.00 | $1,500.00 |
Budgeted Net Operating Income | $2,220.00 | $2,645.00 | $3,495.00 | $8,360.00 |
iguana, inc. Manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
iguana, inc. Manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo. Which cost $2.00 per foot . Each frame takes approximately 30 minuets to build, and the labor rate averages $13 per hour. Iguana has the following inventory policies. Ending finished goods inventory should be 40 percent of the next month's of sales Ending raw materials inventory should be 30 percent of next month;s productions. Expected unit sales (frames ) for the...
iguana, inc. Manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo. Which cost $2.00 per foot . Each frame takes approximately 30 minuets to build, and the labor rate averages $13 per hour. Iguana has the following inventory policies. Ending finished goods inventory should be 40 percent of the next month's of sales Ending raw materials inventory should be 30 percent of next month;s productions. Expected unit sales (frames ) for the...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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 raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $15 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...
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 $13 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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 raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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 raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months...