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% of next months sales
• Ending direct materials inventory should be 30% of next months production.

Expected unit sales (frames) for the upcoming months follow:

Expected unit sales (frames) for the upcoming months follow:

March	350
April	400
May	450
June	550
July	525
August	575

Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $10,800 ($900 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $950 per month plus $0.60 per unit sold

Iguana inc., had $11,900 cash on hand on April 1. Of its sales, 80% is in cash. Of the credit sales, 50% is collected during the month of the sale, and 50% is collected during the month following the sale.

Of direct materials purchases, 80% is paid for during the month purchased and 20% is paid in the following month. Direct materials purchases for March 1 totaled $4,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $300 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment.

1. Compute Iguanas Budgeted Income Statement for quarter 2

	April	May	June	2nd Quarter Total
Budgeted Sales Revenue
Budgeted Costs Of Goods Sold
Budgeted Gross Margin
Budgeted Selling And Administrative Expenses
Budgeted Net Operating Income