Question

In: Accounting

Iguana, Inc., manufactures bamboo picture frames that sell for Tk. 25 each. Each frame requires 4...

Iguana, Inc., manufactures bamboo picture frames that sell for Tk. 25 each. Each frame requires 4 feet of bamboo, which costs Tk. 2.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages Tk. 12.00 per hour. Iguana has the following inventory policies: 1) Ending finished goods inventory should be 40 percent of next month’s sales. 2) Ending direct materials inventory should be 30 percent of next month’s production. Expected unit sales (frames) for the upcoming months follow: March: 275, April:250, May: 300, June: 400, July: 375, August: 425 Variable manufacturing overhead is incurred at a rate of Tk. 0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be Tk. 7,200 (Tk. 600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at Tk. 650 per month plus Tk. 0.60 per unit sold. Iguana, Inc., had Tk. 10,800 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 purchase for March 1 totaled Tk. 2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes Tk. 150 in depreciation. During April, Iguana plans to pay Tk. 3,000 for a piece of equipment. Prepare the following for Iguana, Inc., for the second quarter (April, May, and June). Include each month as well as the quarter 2 total for each budget. 1. Sales budget. 2. Production budget. 3. Direct materials purchase budget. 4. Direct labor budget. 5. Manufacturing overhead budget. 6. Budgeted cost of goods sold. 7. Selling and administrative expenses budget

Solutions

Expert Solution

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!
Due to character limit I am attaching the image for last part of answer 6.
Iguana
Ans 1 April May June Total Note
Budgeted Sales units        250.00           300.00           400.00           950.00 A
Sell price per unit          25.00             25.00             25.00 B
Budgeted Sales Revenue     6,250.00       7,500.00     10,000.00     23,750.00 C=A*B
Cash sale is 80%     5,000.00       6,000.00       8,000.00     19,000.00 D=C*80%
Credit sale is 20%     1,250.00       1,500.00       2,000.00       4,750.00 E=C*20%
Ans 2- Production Budget April May June Total July August Note
Budgeted Sales units        250.00           300.00           400.00           950.00           375.00         425.00 See A
Add: Closing        120.00           160.00           150.00           150.00           170.00 I= 40% of A of next month.
Less: Opening        100.00           120.00           160.00           100.00           150.00 J= 40% of A of same month.
Production Budget        270.00           340.00           390.00       1,000.00           395.00
Ans 3- Material Purchase Budget April May June Total July Note
Production Budget        270.00           340.00           390.00       1,000.00           395.00 See J
Bamboo required per unit             4.00               4.00               4.00               4.00 K
Bamboo required     1,080.00       1,360.00       1,560.00       4,000.00       1,580.00 L=K*J
Add: Closing        408.00           468.00           474.00           474.00 M= 30% of L of next month.
Less: Opening        324.00           408.00           468.00           324.00 N= 30% of L of same month.
Material Purchase Budget (foot)     1,164.00       1,420.00       1,566.00       4,150.00
Cost per foot             2.00               2.00               2.00 O
Material Purchase Budget (cost)     2,328.00       2,840.00       3,132.00       8,300.00 P=N*O
Ans 4- Direct Labor Budget April May June Total Note
Production Budget        270.00           340.00           390.00       1,000.00 See J
Labor Hour required per unit             0.50               0.50               0.50 K
Labor Hour required        135.00           170.00           195.00           500.00 L=K*J
Cost per Hour          12.00             12.00             12.00 O
Direct Labor Budget     1,620.00       2,040.00       2,340.00       6,000.00 P=N*O
Ans 5- Manufacturing overhead Budget
Variable manufacturing overhead Budget April May June Total
Production Budget        270.00           340.00           390.00       1,000.00 See J
Variable manufacturing overhead per unit             0.30               0.30               0.30 S
Variable manufacturing overhead Budget          81.00           102.00           117.00           300.00 T=J*S
Fixed manufacturing overhead        600.00           600.00           600.00       1,800.00
Manufacturing overhead Budget        681.00           702.00           717.00       2,100.00
Ans 7- Selling & admin expenses Budget
Variable Selling & admin expenses Budget April May June Total
Budgeted Sales units

Related Solutions

Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $15 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $15 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
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 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
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 $11 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $15 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 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...
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear...
Iguana, 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...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT