Required Information SB Problem PA8-1 to PA8-3 [The following information applie
ID: 2508582 • Letter: R
Question
Required Information SB Problem PA8-1 to PA8-3 [The following information applies to the questions displayed below lguana, 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 ts takes approximately 30 minutes to build, and the labor rate averages $13 per hour of 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. f it dur . . Expected unit sales tframes) for the upcoming months follow 310 320 370 470 March MayExplanation / Answer
Solution:
Part 2 --- Production Budget in Units
Production Budget in units
April
May
June
2nd Quarter Total
July
Next Month's Expected Unit Sales
$370
470
445
495
Ratio of inventory to future sales
40%
40%
40%
40%
Budgeted Finished Goods Ending Inventory (units)
148
188
178
198
Add: Budgeted Sales (units)
320
370
470
445
Required units of available production
468
558
648
643
Less: Budgeted Beginning Inventory (Ending Finished Goods Inventory of last month)
128
148
188
178
Units to be produced
340
410
460
1210
465
Part 3 – Budgeted Cost of Raw materials purchases
Budgeted Cost of Raw materials purchases
April
May
June
2nd Quarter Total
July
Production Budget (units)
340
410
460
465
Materials requirement per unit (linear feet)
4
4
4
4
Materials needed for production (linear feet)
1360
1640
1840
1860
Add: budgeted ending inventory (30% of the next months materials requirements)
492
552
558
Total materials requirements (in feet)
1852
2192
2398
Less: Beginning Inventory (Ending Inventory of Previous Month)
408
492
552
Materials to be purchased (linear feet)
1444
1700
1846
Raw material cost per foot
$2.00
$2.00
$2.00
Budgeted Cost of Raw material purchases
$2,888
$3,400
$3,692
$9,980
Part 4—Budgeted direct labor cost
Direct Labor Budget
April
May
June
2nd Quarter Total
Units to be produced
340
410
460
Required Direct Labor Hour per unit
0.50
0.50
0.50
Total Direct Labor Hours Required
170
205
230
Direct Labor Cost per hour
$13
$13
$13
Budgeted Direct Labor Cost
$2,210
$2,665
$2,990
$7,865
Part 5 – Budgeted Manufacturing Overhead
Budgeted Manfuacturing Overhead
April
May
June
Quarter 2 Total
Units to be produced
340
410
460
Variable Overhead Rate per unit produced
$0.50
$0.50
$0.50
Budgeted Variable Overhead Cost
$170
$205
$230
Plus: Budgeted Fixed Overhead
$4,800
$4,800
$4,800
Budgeted Manufacturing Overhead
$4,970
$5,005
$5,030
$15,005
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining parts.
Production Budget in units
April
May
June
2nd Quarter Total
July
Next Month's Expected Unit Sales
$370
470
445
495
Ratio of inventory to future sales
40%
40%
40%
40%
Budgeted Finished Goods Ending Inventory (units)
148
188
178
198
Add: Budgeted Sales (units)
320
370
470
445
Required units of available production
468
558
648
643
Less: Budgeted Beginning Inventory (Ending Finished Goods Inventory of last month)
128
148
188
178
Units to be produced
340
410
460
1210
465
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