Question

Required information [The following information applies to the questions displayed below.] 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 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 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 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 1 totaled $2,200. All other operating costs 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.

1. Compute the budgeted cash receipts for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.)

April May June 2nd Quarter Total

Budgeted Cash Receipts

2. Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.)

April May June 2nd Quarter Total

Budgeted Cash Payments

3. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. (Leave no cell blank enter "0" wherever required. Round your answers to 2 decimal places.)

April May June 2nd Quarter Total

Beginning Cash Balance

Plus: Budgeted Cash Receipts

Less: Budgeted Cash Payments

Preliminary Cash Balance

Cash Borrowed / Repaid

Ending Cash Balance

Answer 1

Answer with working is given below

Sales Budget April June Quarter 1,160 470) Budgeted Sales Budgeted Selling price Budgeted Sales (value) 320 $25 $8,000 May 370 $25 $9,250 $25 $25 $11,750 $29,000 1 Budgeted Cash Receipts Cash Sales Credit Sales Total Sales April $6,400 $1,600 $8,000 May $7,400 $1,850 $9,250 June $9,400 $2,350 $11,750 Quarter $23,200 $5,800 $29,000 $6,400.00 $7,400.00 $9,400.00 $23,200.00 Cash Sales Credit Sales March Month April Month May Month June Month Total Collection from Customers $775.00 $800.00 $775.00 $800.00 $1,600.00 $925.00 $925.00 $1,850.00 $1,175.00 $1,175.00 $9,125.00 $11,500.00 $28,600.00 $7,975.00 Budgeted Production Budget June August 470 178 May 370 188 558 July 445 198 Budgeted Sales Add: Closing inventory Total Needs Less: Opening Inventory Production Budget April 320 148 468 128 340 Quarter 1,160 178 1,338 128 1,210 648 643 148 410 460 465 Direct Material Purchase Budget May 1,640 July 1,860 552 Budgeted material needed for production Add: Closing inventory Total Needs Less: Opening Inventory Purchase Budget- Direct Material (Units) Purchase price Total Direct Material Purchase Budget (Value) April 1,360 492 1,852 408 1,444 $2.00 $2,888 2,192 492 1,700 $2.00 $3,400 June 1,840 558 2,398 552 1,846 $2.00 $3,692 Quarter 4,840 558 5,398 408 4,990 $2.00 $9,980 Expected Cash disbursements for Materials Purchases | May June April $440.00 $2,310.40 March Purchase April Purchase May Purchase June Purchase Total purchase payment to Vendors $577.60 $2,720.00 $680.00 $2,953.60 $3,633.60 Quarter $440.00 $2,888.00 $3,400.00 $2,953.60 $9,681.60 $2,750.40 $3,297.60 Budgeted Direct Labor cost May 410 0.50 Quarter 1,210 Budgeted Production Budgeted Direct labor hour Total Direct labor hours Direct labor hour rate Budgeted Direct labor cost April 3401 0.50 170 $13 $2,210 June 460 0.50 230 $13 $2,665 $2,990 $7,865 Budgeted Manufacturing Overhead May June $205 $230/ Variable Manufacturing Overhead Fixed Manufacturing Overhead-Cash Total Manufacturing overhead in cash Depreciation Budgeted Total Manufacturing Overhead April $170 $180 $350 $220 $570 $180 $385 $220 $605 $180 $410 $220 $630 Quarter $605 $540 $1,145 $660 $1,805 Budgeted Selling and Distribution expenses April May $185 $160 Variable Selling and administration expenses Fixed Selling and administration expenses Budgeted Selling and administration expenses June $235 $500 $735 Quarter $580 $1,500 $2,080 $500 $500 $660 $685 2 Budgeted Cash Payments 1 Payments for Purchases Payments for Labor Payment for Manufacturing overhead Payments for Selling and administration expenses Payment for Equipment Budgeted Cost of Goods sold April $2,750.40 $2,210.00 $350.00 $660.00 $3,700.00 $9,670.40 May $3,297.60 $2,665.00 $385.00 $685.00 June Quarter $3,633.60 $9,681.60 $2,990.00 $7,865.00 $410.00 $1,145.00 $735.00 $2,080.00 | $7,032.60 $7,768.60 $20,771.60 Beginning cash balance Add: Budgeted Cash Receipts Total Cash available Less: Budgeted Cash payments Preliminary cash balance Cash Borrowed/Repaid Ending Cash Balance Cash Budget for 2nd Quarter April $10,500.00 $7,975.00 $18,475.00 $9,670.40 $8,804.60 $2,000.00 $10,804.60 May June Total $10,804.60 $10,897.00 $10,500.00 $9,125.00 $11,500.00 $28,600.00 $19,929.60 $22,397.00 $39,100.00 $7,032.60 $7,768.60 $24,471.60 $12,897.00 $14,628.40 $14,628.40 $2,000.00 $0.00 $10,897.00 $14,628.40 $14,628.40