Question
In: Accounting
Iguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear...
Iguana, Inc., manufactures bamboo picture frames that sell for $30 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 $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 | 285 |
| April | 270 |
| May | 320 |
| June | 420 |
| July | 395 |
| August | 445 |
Variable manufacturing overhead is incurred at a rate of $0.50 per
unit produced. Annual fixed manufacturing overhead is estimated to
be $8,400 ($700 per month) for expected production of 4,200 units
for the year. Selling and administrative expenses are estimated at
$750 per month plus $0.50 per unit sold.
Iguana, Inc., had $11,000 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 $3,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $170 in depreciation. During April, Iguana plans to pay $3,200 for a piece of equipment.
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.)
fill the missing spaces.
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| Answer 1 | March | April | May | June | Total | July | August | Note | |
| Budgeted Sales units | 285.00 | 270.00 | 320.00 | 420.00 | 395.00 | 445.00 | A | ||
| Sell price per unit | 30.00 | 30.00 | 30.00 | 30.00 | 30.00 | 30.00 | B | ||
| Budgeted Sales Revenue | 8,550.00 | 8,100.00 | 9,600.00 | 12,600.00 | 30,300.00 | 11,850.00 | 13,350.00 | C=A*B | |
| Cash sale is 80% | 6,840.00 | 6,480.00 | 7,680.00 | 10,080.00 | 24,240.00 | 9,480.00 | 10,680.00 | D=C*80% | |
| Credit sale is 20% | 1,710.00 | 1,620.00 | 1,920.00 | 2,520.00 | 6,060.00 | 2,370.00 | 2,670.00 | E=C*20% |
| Collection Budget | March | April | May | June | Total | |
| Cash sale | 6,840.00 | 6,480.00 | 7,680.00 | 10,080.00 | 24,240.00 | See D |
| 50% of Credit sale in the same month | 855.00 | 810.00 | 960.00 | 1,260.00 | 3,030.00 | F= 50% of E |
| 50% of Credit sale in the following same month | 855.00 | 810.00 | 960.00 | 2,625.00 | G= 50% of E of previous month. | |
| Total Scheduled Collections | 8,145.00 | 9,450.00 | 12,300.00 | 29,895.00 | H=D+F+G |
| Answer 2 | ||||||||
| Production Budget | March | April | May | June | Total | July | August | |
| Budgeted Sales units | 285.00 | 270.00 | 320.00 | 420.00 | 395.00 | 445.00 | See A | |
| Add: Closing | 108.00 | 128.00 | 168.00 | 158.00 | 178.00 | I= 40% of A of next month. | ||
| Less: Opening | 114.00 | 108.00 | 128.00 | 168.00 | 158.00 | J= 40% of A of same month. | ||
| Production Budget | 279.00 | 290.00 | 360.00 | 410.00 | 415.00 |
| Answer 3 | ||||||
| Material Purchase Budget | April | May | June | Total | July | |
| Production Budget | 290.00 | 360.00 | 410.00 | 415.00 | See J | |
| Bamboo required per unit | 4.00 | 4.00 | 4.00 | 4.00 | K | |
| Bamboo required | 1,160.00 | 1,440.00 | 1,640.00 | 1,660.00 | L=K*J | |
| Add: Closing | 432.00 | 492.00 | 498.00 | M= 30% of L of next month. | ||
| Less: Opening | 348.00 | 432.00 | 492.00 | N= 30% of L of same month. | ||
| Material Purchase Budget | 1,244.00 | 1,500.00 | 1,646.00 |
| Direct Material Payment | March | April | May | June | Total | |
| Material Purchase Budget | 1,244.00 | 1,500.00 | 1,646.00 | See N | ||
| Cost per foot | 3.00 | 3.00 | 3.00 | O | ||
| Direct Material cost | 3,000.00 | 3,732.00 | 4,500.00 | 4,938.00 | 13,170.00 | P=N*O |
| 80% paid in same month | 2,400.00 | 2,985.60 | 3,600.00 | 3,950.40 | 10,536.00 | Q=P*80% |
| 20% paid in next month | 600.00 | 746.40 | 900.00 | 2,246.40 | R= 20% of P of previous month. | |
| Direct Material Payment | 3,585.60 | 4,346.40 | 4,850.40 |
 ekkarill92 answered 2 years agoRelated SolutionsIguana, Inc., manufactures bamboo picture frames that sell for $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $13 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $11 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 each. Each frame requires 4 linear feet of bamboo, which costs
$3.50 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 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 $30 each. Each frame requires 4 linear...Iguana, Inc., manufactures bamboo picture frames that sell for
$30 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 $11 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...
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