In: Accounting
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displayed below.]
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 raw materials inventory should be 30 percent of next month’s production.
Expected unit sales (frames) for the upcoming months
follow:
March | 280 |
April | 260 |
May | 310 |
June | 410 |
July | 385 |
August | 435 |
Variable manufacturing overhead is incurred at a rate of $0.40 per
unit produced. Annual fixed manufacturing overhead is estimated to
be $7,800 ($650 per month) for expected production of 3,000 units
for the year. Selling and administrative expenses are estimated at
$700 per month plus $0.50 per unit sold.
Iguana, Inc., had $10,900 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 $2,500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $160 in depreciation. During April, Iguana plans to pay $3,100 for a piece of equipment.
1.
value:
21.00 points
Required information
Required:
Compute the following for Iguana, Inc., for the second quarter
(April, May, and June).
References
eBook & Resources
WorksheetLearning Objective: 08-03b Prepare the following components of the operating budget: Production budget.Learning Objective: 08-03e Prepare the following components of the operating budget: Manufacturing overhead budget.
Difficulty: 3 HardLearning Objective: 08-03c Prepare the following components of the operating budget: Raw materials purchases budget.Learning Objective: 08-03f Prepare the following components of the operating budget: Cost of goods sold budget.
Learning Objective: 08-03a Prepare the following components of the operating budget: Sales budget.Learning Objective: 08-03d Prepare the following components of the operating budget: Direct labor budget.Learning Objective: 08-03g Prepare the following components of the operating budget: Selling and administrative expense budget.
Check my work
2.
value:
4.00 points
Required information
Required:
Complete Iguana's budgeted income statement for quarter 2.
(Round cost per unit in intermediate calculations and final
answers to 2 decimal places.)