Question

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 direct materials inventory should be 30 percent of next month's production Expected unit sales (frames) for the upcoming months follow March Variable manufacturing overhead is incurred at a cate or $0.30 per unit produced, Annual fixed manufacturing overhead 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 Apror its sales, 80 percentis in cash of the credit sales 50 percent is collected during the month or the sale, and so percentis collected during the month following the sale or direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Otec materials purchases of March totaled $2.000. All other aperating costs are paid during the month incurred. Monthlywed manufacturing overhead includes $150 in depreciation. During April, guana plans to pay $3.000 for a piece of equipment PA8-3 (Static) Preparing Cash Budget (LO 8-4) Required: 1. Compite the budgeted casti nece istoriguara 2. Compute the budgeted cash payments for all 3. Prepare the cash budget for Iguan. Assume conna minimum Gashi balance cariereinrements of $100 to maintain a $10.000

Answer 1

Aug 425 $ 25.00 $ 10,625.00 Aug Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you. Budgeted Cash Receipts: March April May June Total July Budgetes Sale units 275 250 300 400 950.0 375 Budgeted selling price 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 Budegeted sales revenue 6,875.00 $ 6,250.00 $ 7,500.00 $ 10,000.00 $ 23,750.00 $ 9,375.00 April May June Total Cash Sale 80% $ 5,000 $ 6,000 $ 8,000 $ 19,000 Credit Sale: 50% in Same Month $ 625 $ 750 $ 1,000 $ 2,375 50% in Next month $ 625 $ 750 $ 1,375 1,000 March Sale $ 688 $ 688 Total cash Receipts $ 6,313 $ 7,375 $ 9,750 $ 23,438 Budgeted Production-Working April May June Total July Budgetes Sale units 250 300 400 950 Add: Desired Endint inventory 40% 120 160 150 150 170 Total Need 370 460 550 1,100 545 Less: Beginning inventory -100 -160 -100 - 150 Budgeted Production 270 390 1,000 395 Budgeted cash Payment for Material April May June Total July Budgeted Production 270 390 1,000 395 Raw Material needed per unit 4 4 Total raw Material needed 1,080 1,360 1,560 4,000 1,580 Add: Desired Endint inventory 30% 408 468 474 474 Total Need 1,488 1,828 2,034 4,474 Less: Beginning inventory -324 -408 -468 -324 Budgeted Purchases 1,420 1,566 4,150 Rate per unit of material 2.00 2.00 2.00 2.00 Budgeted dollar purchases 2,328 2,840 3,132 8,300 375 425 -1201 340 340 1,164 April May June Total Payable $2,000*20% March Payable 80% in Same month 20% in next month $ $ 80% 20% 400 1,862 $ $ 2,272 $ 466 $ $ 2,506 $ 568 $ 400 6,640 1,034 $ 626 Total Payment for Purchases $ 2,262 $ 2,738 $ 3,074 $ 8,074 Budgeted Cash Payment April $ $ Payment for Material Purchases Payment for Direct Labor Variable Manufacturing overhead Fixed Manufacturing overhead Variable selling and Admin Fixed Selling and Admin Equipment $6.00 Per unit produced $0.30 Per unit produced $600-$150 dep $0.60 per unit sold May June 2,262 $ 2,738 $ 1,620 $ 2,040 $ 81 $ 102 $ 450 $ 450 $ 150 $ 180 $ 650 $ 650 $ 3,000 Total 3,074 $ 2,340 $ 117 $ 450 $ 240 $ 650 $ 8,074 6,000 300 1,350 570 1,950 $ $ 6,871 $ . 18,244 Total budgeted cash payment $ 8,213 $ 6,160 $ Cash Budget: Beginning cash Balance Add: Cash receipts Less: cash payments Preliminary Cash balance Cash borrow/Repaid Ending Cash Balance April May June Total $ 10,800 $ 10,899 $ 10,115 $ 10,800 $ 6,313 $ 7,375 $ 9,750 $ 23,438 $ -8,213 $ -6,160 $ -6,871 $ -21,244 $ 8,899 $ 12,115 $ 12,994 $ 12,994 $ 2,000 $ -2,000 $ 10,899 $ 10,115 $ 12,994 $ 12,994