Question

SB Problem PAB-1 to PA8-3 The following information applies to the questions played below) Iguana, Inc., manufactures bamboo picture frames that sell for $20 each Each trame requires 4 linear feet of bamboo, which costs $150 per tot achframe t averages 513 per hour Iguana has the following inventory policies i tly 30 minutes to build and the laborate • Ending finished goods inventory should be 40 percent of next month's ses • Ending raw materials inventory should be 30 percent of next mone's production Expected unit sales frames) for the upcoming months follow August Variable manufacturing overhead is curred are of $0.30 per produced Annualwed manufacturing overhead is estimated to be 37.200 1600 per month to expected production of 6.000 units for the year Selling and administrative expenses estimated $650 per month plus 30.50 per un sold Iguana, Inc., had $15.000 cash on hand on April 30 percentis in cahother a p i s ceted ung the month of the land 50 percent is colected during the month following the Ofrow at purchas e s padouring chased and 20 percent is paid in the following w h ere for Marche SH Al other costs are paid during the month incurred Mon ed mancung werd in 200 tion During Art, iguana plano pay $1.000 rp m

Answer 1

	Iguana Inc.
	Schedule of Sales Revenue for Second Quarter
	Month	April	May	June	Quarter
1)	Sales=(A)	390	440	540	1370
	Unit selling price=(B)	$                                                20.00	$                                                    20.00	$                                                  20.00	$                       20.00
	Sales Price=(A)*(B)	$                                          7,800.00	$                                              8,800.00	$                                          10,800.00	$               27,400.00
		Production Budget
2)	Month	April	May	June	Quarter
	Sales (Units)	390	440	540	1370
	Add: Ending Inventory	176	216	206	206
	Total Needs	566	656	746	1576
	Less: Beginning Inventory	156	176	216	156
	Production	410	480	530	1420
		Ending Inventory
	Month	April	May	June
	Ending Inventory	(440*40%)	(540*40%)	(515*40%)
	Beginning Inventory	(390*40%)	(440*40%)	(540*40%)
	July Production=(sales+Ending Inventory-Beginning Inventory)=(515+565*40%-206)=		535
	Raw Material Purchase Budget
3)	Month	April	May	June	Quarter
	Production	410	480	530	1420
	Raw Material required per unit	4	4	4	4
	Material required per unit	1640	1920	2120	5680
	Add: Ending Inventory	144	159	160.5	160.5
	Total Needs	1784	2079	2280.5	5840.5
	Less: Beginning Inventory	123	144	159	123
	Raw Material Purchase	1496	1761	1959.5	5519.5
	Raw Material cost per unit	$                                                   1.50	$                                                      1.50	$                                                    1.50	$                          1.50
	Cost of Raw Material Purchase	$                                          2,244.00	$                                              2,641.50	$                                            2,939.25	$                 8,279.25
		Raw Material Inventory
	Month	April	May	June
	Ending Raw Material Inventory	(480*30%)	(530*30%)	(535*30%)
	Beginning Raw Material Inventory	(410*30%)	(480*30%)	(530*30%)
4)		Budgeted Labor Cost
	Months	April	May	June	Quarter
	Production=(i)	410	480	530	1420
	Direct Labor hours required per unit=(.30/.60)=(ii)	0.5	0.5	0.5	0.5
	Total Direct Labor Hours=(iii)=(i)*(ii)	205	240	265	710
	Direct Labor rate per hours=(iv)	$                                                13.00	$                                                    13.00	$                                                  13.00	$                       13.00
	Direct Labor cost=(iii)*(iv)	$                                          2,665.00	$                                              3,120.00	$                                            3,445.00	$                 9,230.00
5)	Manufacturing Overhead
	Month	April	May	June	Quarter
	Production=(A)	$                                              410.00	$                                                 480.00	$                                                530.00	$                 1,420.00
	Variable Manufacturing Overhead per unit=(B)	$                                                   0.30	$                                                      0.30	$                                                    0.30	$                          0.30
	Total Variable Manufacturing Cost=(C )=(A)*(B)	$                                              123.00	$                                                 144.00	$                                                159.00	$                     426.00
	Fixed Manufacturing Overhead=(D)	$                                              600.00	$                                                 600.00	$                                                600.00	$                     600.00
	Total Administrative Expenses=(C )+(D)	$                                              723.00	$                                                 744.00	$                                                759.00	$                 1,026.00
	Manufacturing Cost per unit
	Direct Material(4ft* 1.5per ft)	$                                                   6.00
	Direct Labor(.50*13)	$                                                   6.50
	Variable Overhead	$                                                   0.30
*	Fixed Overhead	$                                                   1.20
	Manufacturing Cost per unit	$                                                14.00
*	Fixed Overhead=($7200/6000)
6)	Cost of good sold
	Month	April	May	June	Quarter
	Sales	390	440	540	1370
	Manufacturing cost per unit	$                                                14.00	$                                                    14.00	$                                                  14.00	$                       14.00
*	Cost of good sold	$                                          5,460.00	$                                              6,160.00	$                                            7,560.00	$               19,180.00
	Sales* manufacturing cost per unit
	Selling & Administrative Expenses Budget
7)	Month	April	May	June	Quarter
	Sales=(A)	390	440	540	1370
	Variable Selling & Administrative Expenses=(B)	$                                                   0.50	$                                                      0.50	$                                                    0.50	$                          0.50
	Total Variable Selling & Administrative expenses=(C )=(A)*(B)	$                                              195.00	$                                                 220.00	$                                                270.00	$                     685.00
	Fixed Selling & administrative Expenses	$                                              650.00	$                                                 650.00	$                                                650.00	$                 1,950.00
	Total Selling & Administrative Expenses	$                                              845.00	$                                                 870.00	$                                                920.00	$                 2,635.00