The following information applies for the questions below) - Ending finished goo

Question

The following information applies for the questions below) - Ending finished goods inventory should be 40 percent of next months sales. - Endinf raw materials inventory should be 30 percent of next months productions.
Expect unit sales (frames) for the upcoming months follow:
March - 305 April - 310 May - 360 June - 460 July - 435 August 485
Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $7200 ($600 per month) for expected production of 4500 units for the year. Selling and administrative expense are estimated at $650 per month plus $0.50 per unit sold.
Iguana, inc., had $13600 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 purchased, 80 percent is paid for during the month purchased and 20 percent is paid for the following month. Raw material purchases for March 1 totaled $3600. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $210 in depreciation. During April, Iguana plans to pay $3600 for a peice Of equipment. 33.33 points Required: Complete Iguana's budgeted income statement for quarter 2 (Round cost per unit in intermediate calculations and final answers to 2 decimal places.) Budgeted Income Statement For the Quarter Ending June 2nd Quarter Total Apri May June Budgeted Gross Margin Budgeted Net Operating Income References eBook & Resources O Type here to search 99+

Explanation / Answer

Solution:

Fixed overhead allocation rate = $7,200 / 4500 = $1.60 per unit

Compuatation of Unit Product Cost - Iguana Inc. Particulars Per Unit Cost Direct Material (4*$3.50) $14.00 Direct labor (0.5 * $12) $6.00 Variable manufacturing overhead $0.40 Fixed manufacturing overhead $1.60 Unit Product Cost $22.00

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