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Chapter 8-Budgetary Planning: Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo, which costs $2.00

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Chapter 8-Budgetary Planning: 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 approximately 30 minutes to build, and the labor rate averages $12.00 per hour. Iguana has the following inventory policies 1-3 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: 275 March 250 April May June July August 300 400 375 425 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $650 per month plus $0.60 per unit sold. Iguana, Inc., had $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 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 $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $150 in depreciation. During April, Iguana plans to pay $3,000 for a piece of equipment. Assume the company can borrow in increments of $1,000.00 to maintain a $10,000.00 minimum cash balance. a. Prepare the Sales budget for the second quarter (April-june) b. Prepare the Productionbudget for the second quarter (April-June) c. Prepare the Raw Materials purchases budget for the second quarter (April- June) d. Prepare the Direct Labor budget for the second quarter (April-June) e. Prepare the Manufacturing Overhead budget for the second quarter (April- June) f. Prepare the Cost of Goods Sold budget for the second quarter (April-June) g. Prepare the Selling and Administrative Expenses budget for the second quarter (April-June) h. Prepare the Budgeted Income Statement for the second quarter (April-June) i. Prepare the Cash Receipts budget for the second quarter (April-June) j. Prepare the Cash Payments budget for the second quarter (April-June) k. Prepare the Cash budget for the second quarter (April-June)

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