iguana Incorporated manufacturer is bamboo picture frames that sell for $25 each
ID: 2511002 • Letter: I
Question
iguana Incorporated manufacturer is bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo. Which cost $2 per foot. Each frame takes approximately 30 minutes to build and the labor rate averages $14 per hour. Iguana has the following inventory policies
Most Visitedmy.utrgv.edu ALGEBRA Login Time remaining: 0:58:32 Save & Exit Submit The following Information applies to the questions displayed below) Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 lnear feet of bamboo, which costs $2.00 per foot Each frame takes approximately 30 minutes to build, and the labor rate averages $14 per hour. Iguana has the following Inventory polilcies e Ending finished goods Inventory should be 40 percent of next month's sales. e Ending raw materials Inventory should be 30 percent of next month's production. Expected unlt sales (frames) for the upcoming months follow: 30 360 410 510 485 535 March April May August Varlable manufacturing overhead is Incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $8400 ($700 per month) for expected production of 4.000 units for the year Seiling and administrative expenses are estimated at $750 per month plus -Explanation / Answer
IGUANA Inc. 1) BUDGETED CASH RECEIPTS S.No. Details Apr May June Qtr Total A BUDGETED CASH RECEIPTS - See Explanation i & ii $ 8,925 $ 10,125 $ 12,500 $ 31,550 2) BUDGETED CASH PAYMENTS S.No. Details Apr -$ May-$ June-$ Qtr Total A Raw Materials ( Cash Disbursement) - See Explanation vi 3,126.40 3,617.60 3,953.60 10,697.60 B Budgeted Labor Cost - See Explanation vii 2,660.00 3,150.00 3,500.00 9,310.00 C Variable Manufacturing Overhead Budget - See Explanation viii 152.00 180.00 200.00 532.00 D Fixed Manufacturing Overhead excluding Depreciation - See Explanation ix 440.00 440.00 440.00 1,320.00 E Depreciation - See Explanation ix 260.00 260.00 260.00 780.00 F Variable Selling and Admin Budget - See Explanation x 180.00 205.00 255.00 640.00 G Fixed Selling and Admin Budget - See Explanation xi 750.00 750.00 750.00 2,250.00 H Purchase of Equipment 2,500.00 - - 2,500.00 TOTAL CASH PAYMENTS - ANSWER 10,068.40 8,602.60 9,358.60 28,029.60 3) CASH BUDGET S.No. Details Apr -$ May-$ June-$ Qtr Total A Beginning Cash Balance 13,500.00 13,356.60 13,879.00 Add B Budgeted Cash Receipts 8,925.00 10,125.00 12,500.00 31,550.00 Less C Budgeted Cash Payments 10,068.40 8,602.60 9,358.60 28,029.60 D Cash Balance ( A + B - C) 12,356.60 14,879.00 17,020.40 E Cash Borrowal or repayment to maintain minimum balance of $ 13,000 1,000.00 (1,000.00) F Closing Cash Balance ( D + E ) 13,356.60 13,879.00 17,020.40 Note : There is no repayment in June, as there has been no fresh borrowing EXPLANATIONS i. Sales Budget S.No. Details March Apr May June Qtr Total A Budgeted Sales Units 330 360 410 510 1280 B Sale Price per Unit 25 25 25 25 C Sales Budget (A * B) $ 8,250 $ 9,000 $ 10,250 $ 12,750 $ 32,000 ii. Budget Cash Receipts Budget S.No. Details March Apr May June Qtr Total A Sales Budget $ 8,250 $ 9,000 $ 10,250 $ 12,750 $ 32,000 B Cash Collections @ 80% of Sales (80% of A) $ 6,600 $ 7,200 $ 8,200 $ 10,200 $ 25,600 C Credit Sales @ 20% of Sales (20% of A) collected as foll: $ 1,650 $ 1,800 $ 2,050 $ 2,550 $ 6,400 i. 50% collected in month of Sale $ 825 $ 900 $ 1,025 $ 1,275 $ 3,200 ii. 50% collected in the month following the sale $ - $ 825 $ 900 $ 1,025 $ 2,750 D Budget Cash Receipts : B + C (i) + C (ii) $ 8,925 $10,125 $12,500 $ 31,550 iii. Production Budget S.No. Details March Apr May June Qtr Total A Budgeted Sales Units 330 360 410 510 1280 B Closing Finished Goods Inventory - See Note Below - Point D 144 164 204 194 C Opening Finished Goods Inventory - See Note below - Point E 132 144 164 204 D Production Budget ( A + B -C) 342 380 450 500 1,330 iv. Inventory Calculation R E Q U I R E D S.No. Details March Apr May June July August A Budgeted Sales Units 330 360 410 510 485 535 B Linear feet of Bamboo required / Frame 4 4 4 4 4 4 C Total Linear feet of Bamboo reqd for sales ( A * B) 1,320 1,440 1,640 2,040 1,940 2,140 D Closing Finished Goods Inventory @ 40% of next month sale 144 164 204 194 214 E Opening Finished Goods Inventory 132 144 164 204 194 214 F Production ( A + D - E) 342 380 450 500 505 G Raw Material (Bamboo) required for production: F * B 1368 1520 1800 2000 2020 H Closing Raw material Inventory of Bamboo - 30 % of next month Production 456 540 600 606 I. Opening Raw Material Inventory of Bamboo 410.400 456 540 600 606 J. Cost per feet of Bamboo $ 2 $ 2 $ 2 $ 2 $ 2 v. Raw Materials ( Bamboo) Purchase Budget S.No. Details March Apr May June Qtr Total A Raw Material (Bamboo Consumtion) - See Point G in Inventory Calculation 1368 1520 1800 2000 5320 B Closing Raw Materials Inventory - See Inventory Calculation - Point H 456 540 600 606 1746 C Opening Raw Materials Inventory - See Inventory Calculation- Point I 410.40 456 540 600 1596 D Purchase (Bamboo) Budget ( A + B -C) 1,413.60 1,604 1,860 2,006 5470 E Cost of Bamboo per foot $ 2 $ 2 $ 2 $ 2 F Purchase Budget - US $ ( D * E) $2,827.20 $ 3,208 $ 3,720 $ 4,012 $ 10,940 vi. Raw Material Payments ( Cash Disbursement) Schedule S.No. Details March Apr May June Qtr Total A Raw Material (Bamboo) Purchases $2,827.20 $ 3,208 $ 3,720 $ 4,012 $ 10,940 B Cash Purchases - 80% of total Raw Material purchases (80% of A) $2,261.76 $ 2,566 $ 2,976 $ 3,210 $ 8,752 C Credit Purchases - 20% of Raw Material Purchases Budget (20% of A) $ 565.44 $ 641.60 $ 744.00 $ 802.40 $ 2,188.00 D Credit Purchases disbursement schedule : i. Paid in the following month. (Given: March Raw Material Purchases ; $ 2800) 560.00 641.60 744.00 1,945.60 E Total Raw Materials ( Cash Disbursement) : B + D (i) $ 3,126.40 $ 3,617.60 $ 3,953.60 $ 10,698 vii. Labor Budget S.No. Details March Apr May June Qtr Total A Budgeted Production - See Production Budget ( Explanation ii) 342 380 450 500 1330 B Hours required to build one frame ( Given) 0.5 0.5 0.5 0.5 0.5 C Direct Labor Hours Required ( A * B) 171 190 225 250 665 D Direct Labor Hour Rate per Hour $ 14 $ 14 $ 14 $ 14 $14 E Budgeted Direct Labor Cost $ 2,394 $ 2,660 $ 3,150 $ 3,500 $9,310 viii. Variable Manufacturing Overhead Budget S.No. Details March Apr May June Qtr Total A Budgeted Production - See Production Budget ( Explanation ii) 342 380 450 500 1330 B Variable Overhead rate/ Unit produced (Given) 0.4 0.4 0.4 0.4 0.4 C Variable Manufacturing Overhead Budget 137 152 180 200 532 ix. Fixed Manufacturing Overhead Budget S.No. Details March Apr May June Qtr Total A Fixed Manufacturing Overhead - Given - $ - 700 700 700 2100 B.Less Depreciation ( Given) - $ 260 260 260 780 C Fixed Manufacturing Overhead Budget excluding Depreciation - $ 440 440 440 1,320 x. Selling and Administration Expenses - Variable Budget S.No. Details March Apr May June Qtr Total A Sales Quantity Budget - 360 410 510 1280 B Variable Overhead rate per unit sold $ (Given) 0.5 0.5 0.5 0.5 C Variable Sales and Administration Overhead $ - A * B 180 205 255 640 xi. Selling and Administration Expenses - Fixed Budget S.No. Details March Apr May June Qtr Total A Fixed Sales and Administration Overhead - Given $ - 750 750 750 2250
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