Iguana, Inc., manufactures bamboo picture frames that sell for $$25$ each. Each frame requires $4$ linear feet of

bamboo, which costs $$2\mathrm{.}00$ per foot. Each frame takes approximately $30$ minutes to build, and the labor rate

averages $$12\mathrm{.}00$ 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:

Variable manufacturing overhead is incurred at a rate of $$0\mathrm{.}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\mathrm{.}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 $1$ totale $$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.

Required: 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.

Sales budget.

Production budget.

Raw materials purchases budget.

Direct labor budget.

Manufacturing overhead budget.

Budgeted cost of goods sold.

Selling and administrative expenses budget.

Budgeted cash receipts. Include each month $($April$-$June$)$ as well as quarter $2$ totals.

Budgeted cash payments.

Cash budget. Assume the company can borrow in increments of $$1,000$ to maintain a $$10,000$

cash balance.

Budgeted Income Statement