Question

Required information [The following information applies to the questions displayed below] lguana, 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 350 April Мay 400 450 550 June July August 525 575 Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $10,800 ($900 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $950 per month plus $0.60 per unit sold. lguana, Inc., had $11,900 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 $4,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $300 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment.

Answer 1

Answer is given below

2nd April May June Quarter Total $35,000 $1,450 $14,875 $10,150 $3,280 $28,140 $3,690 $10,000 420 1 Budgeted Sales Revenue $13,750 540 $11,250 2 Budgeted Production in Units 3 Budgeted Cost of Direct Material purchases 490 $5,050 $3,430 $1,096 $9,045 $5,415 $3,780 $4,410 4 Budgeted Direct Labor cost 5 Budgeted Manufacturing Overhead 6 Budgeted Cost of Goods sold 7 Total Budgeted Selling and Administration expense $2,940 $1,068 $8,040 $1,190 $1,116 $11,055 $1,280 $1,220 Sales Budget April 400 May 450 June Quarter Budgeted Sales Budgeted Selling price Budgeted Sales (value) 550 25 $35,000 1,400 25 25 25 $10,000 $13,750 $11,250 Expected Cash Collection April 8,000 2,000 $10,000 May 9,000 June Quarter Cash Sales 28,000 11,000 Credit Sales 2,250 2,750 7,000 $11,250 $35,000 Total Sales $13,750 Cash Sales Credit Sales March Month 11,000 28,000 8,000 9,000 875 875 1,000 2,000 April Month 1,000 May Month June Month Total Collection from Customers 2,250 1,125 1,125 1,375 1,375 $9,875 $11,125 $13,500 $34,500 Budgeted Production Budget August April July May June Quarter Budgeted Sales Add: Closing inventory 1,400 400 450 550 525 575 220 210 230 210 180 760 220 540 1,610 160 1,450 580 670 755 210 Less: Opening Inventory Production Budget 160 180 420 490 545 $0 Direct Material Purchase Budget April 1,680 588 Quarter July 2,180 May 1,960 648 June Budgeted material needed for production Add: Closing inventory 5,800 2,160 654 654 0 2,268 504 2,608 2,814 6,454 648 504 Less: Opening Inventory Purchase Budget- Direct Material (Units) 588 5,950 1,764 2,020 2,166 Purchase price Total Direct Material Purchase Budget (Value) 2.50 14,875 2.50 2.50 2.50 4,410 5,415 5,050 Expected Cash disbursements for Materials Purchases April 800 June May Quarter March Purchase April Purchase May Purchase March Purchase Total purchase payment to Vendors 800 1,764 1,411 353 1,616 404 2,020 1,733 1,733 $2,211 $1,969 $2,137 $6,317 Budgeted Direct Labor cost Quarter April 420 0.50 May 490 June Budgeted Production Budgeted Direct labor hour Total Direct labor hours Direct labor hour rate 1,450 540 0.50 0.50 270 210 245 725 $14 $2,940 $14 $3,430 $14 $10,150 Budgeted Direct labor cost $3,780 Budgeted Manufacturing Overhead April $168 $600 June May $196 $600 Quarter Variable Manufacturing Overhead Fixed Manufacturing Overhead- Cash Total in Cash Depreciation Budgeted Total Manufacturing Overhead $580 $1,800 $2,380 $900 $3,280 $216 $600 $768 $300 $1,068 $796 $816 $300 $1,116 $300 $1,096 Budgeted Selling and Distribution expenses April Quarter May $270 $950 $1,220 June Variable Selling and administration expenses Fixed Selling and administration expenses Budgeted Selling and Distribution expenses $240 $950 $1,190 $330 $950 $1,280 $840 $2,850 $3,690 Budgeted Cost of Goods Sold April 400 $20.10 $8,040 May 450 $20.10 June Quarter Budgeted Sales units Budgeted manufacturing cost Budgeted Cost of Goods sold 550 $20.10 $11,055 1,400 $20.10 $28,140 $9,045 Budgeted Manufacturing cost per unit Direct Material $10.00 $7.00 $0.40 $2.70 $20.10 Direct Labor Variable Manufacturing overhead Fixed Manufacturing overhead Total Manufacturing cost per unit