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 $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 April May 48 510 July August Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $8,400 (5700 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at 5750 per month plus $0.50 per unit sold. Iguana, Inc., had $13,500 cash on hand on April 1. Of its sales, 80 percent is in cash. Or 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 $2,800. All other operating costs are paid during the month incurred Monthly foxed manufacturing overhead includes $260 in depreciation. During April, Iguana plans to pay $2.500 for a piece of equipment. Required: moute the budgeted cash receipts for Iguana

Answer 1

Answer is given below with working notes

Sales Budget May 410 Budgeted Sales Budgeted Selling price Budgeted Sales (value) April 360 $25 $9,000 $25 June 510 $25 $12,750 Quarter 1,280 $25 $32,000 $10,250 1 Budgeted Cash Receipts Cash Sales - 80% Credit Sales - 20% Total Sales April | $7,200 $1,800 $9,000 May $8,200 $2,050 $10,250 June $10,200 $2,550 $12,750 Quarter $25,600 $6,400 $32,000 $7,200 $8,200 $10,200 $25,600 Cash Sales Credit Sales collection March Month (50% of $1,650) April Month May Month June Month Total Collection from Customers $825 $900 $900 $1,025 $1,025 $1,275 $12,500 $825 $1,800 $2,050 $1,275 $31,550 $8,925 $10,125 March Sales - 330 X 25 = $8,250, Credit sales 20% of $8,250 = $1,650 Budgeted Production Budget June July August 510 485 214 Budgeted Sales Add: Closing inventory (40% of next month sales) Total Needs Less: Opening Inventory Production Budget April 360 164 524 144 380 May 410 204 614 164 450 194 704 204 500 Quarter 1,280 194) 1,474 144 1,330 699 194 5 05 April Opening Inventory - 40% of April sales - 360*40% Direct Material Purchase Budget April May June Quarter July 5,320 606 Bamboo needed per unit of output 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) 1,520 540 2,060 456 1,604 $2.00 $3,208 1,800 600 2,400 540 1,860 $2.00 $3,720 2,000 606 2,606 600 2,006 5,926 456 5,470 $2.00 $10,940 $2.00 $4,012 April Opening Inventory -40% of April requirement - 1520*30% Expected Cash disbursements for Materials Purchases April May June $560 $2,566 March Purchase (20% of $2,800) April Purchase May Purchase June Purchase Total purchase payment to Vendors $642 $2,976 Quarter $560 $3,208 $3,720 $3,210 $10,698 $744 $3,210 $3,954 $3,126 $3,618 Budgeted Direct Labor cost April May 450 0.50 380 June 500 0.50 Quarter 1,330 0.50 Budgeted Production Budgeted Direct labor hour Total Direct labor hours Direct labor hour rate Budgeted Direct labor cost 190 250 665 $14 $2,660 $14_ $3,150 $3,500 $9,310 Budgeted Manufacturing Overhead April Quarter May $0.40 June $0.40 Variable Manufacturing Overhead rate $0.40) $180 Variable Manufacturing Overhead Fixed Manufacturing Overhead-Cash Total Manufacturing overhead in cash Depreciation Budgeted Total Manufacturing Overhead $152 $440 $592 $260 $852 $620 $260 $880 $200 $440 $640 $2601 $900 $532 $1,320 $1,852 $780 $2,632|| Fixed manufacturing overhead paid in cash = $700 - $260 = $440 Budgeted Selling and Distribution expenses April $0.50 May $0.50 June $0.50 Quarter $0.50 Variable Selling and administration expenses- $0.50 per unit sold $180 Variable Selling and administration expenses Fixed Selling and administration expenses Budgeted Selling and Distribution expenses $750 $930 $205 $750 $955 $255 $750 $1,005 $640 $2,250 $2,890 2 Budgeted Cash Payments Payments for Purchases Payments for Labor Payment for Manufacturing overhead Payments for Selling and Distribution expenses Payment for Equipment Budgeted Cost of Goods sold April May June Quarter $3,126.401 $3,617.60 $3,953.60 $10,697.60 $2,660.00 $3,150.00 $3,500.00 $9,310.00 $592.00 $620.00 $640.00 $1,852.00 $930.00 $955.00 $1,005.00 $2,890.00 $2,500.00 $9,808.40 $8,342.60 $9,098.60 $24,749.60 | 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 May June Total $13,500.00 $13,616.60 $14,399.00 $13,500.00 $8,925.00 $10,125.00 $12,500.00 $31,550.00 $22,425.00 $23,741.60 $26,899.00 $45,050.00 $9,808.40 $8,342.60 $9,098.60 $27,249.60 | $12,616.60 $15,399.00 $17,800.40f $17,800.40 | $1,000.00 $1,000.00 $0.00 $0.00 $13,616.60 $14,399.00 $17,800.40 $17,800.40