Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Iguana, incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $1.50 per foot. Each

image text in transcribed
image text in transcribed
Iguana, incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $1.50 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: Variable manufacturing overhead is incurred at a rate of $0.20 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 pius $0.50 per unit sold. Iguana, Incorporated, 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 direct materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month. Direct materials purchases for March 1 totaled $2,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overthead includes $320 in depreciation. During April, Iguana plans to pay $4,100 for a piece of equipment. Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for lguana. Assume the company can borrow in increments of $1,000 to maintain a $10,000 minimum cash balance. No interest is charged if the loan is paid off by the end of the next quarter. Complete this question by entering your answe Prepare the cash budget for Iguana. Assume the corr increments of $1,000 to maintain a $10,000 minimur interest is charged if the loan is paid off by the end o Note: Leave no cell blank enter "0" wherever requirer 2 decimal places

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Future Of Auditing

Authors: David Hay

1st Edition

1138477087, 9781138477087

Students also viewed these Accounting questions

Question

Identify who may be responsible for performance appraisal.

Answered: 1 week ago

Question

Explain the performance appraisal period.

Answered: 1 week ago