90.2K

Verified Solution

Link Copied!

Iguana, Inc. manufactures bamboo picture frames that sell for $25 each. Each frame requires four linear feet of bamboo, which cost about $2.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate average is $14 per hour. Iguana has the following inventory policies:

Ending finished goods inventory should be 40% of next months sales.

ending direct materials inventory should be 30% of next months production.

Expected unit sales (frames) for the upcoming months follow:

March 370

April 440

May 490

June 590

July 565

August 615

Variable manufacturing overhead is incurred at a rate of $.40 per unit produce. Annual fixed manufacturing overhead is estimated to be $7200 ($600 per month) for expected production of 4,500 units for the year. Selling and administrative expenses are estimated at $650 per month plus $.50 per unit sold.

Iguana, Inc., had $11,200 on cash in hand on April 1. I would sales, 80% is in cash. Of the credit sales, 50% is collected during the month of the sale, and 50% is collected during the month of the following sale.

Of direct materials purchases, 80% is paid during the month of purchased and 20% is paid in the following month. Direct materials purchases for March 1 totaled to $4500. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $340 in depreciation. During April, iguana plans to pay $3500 apiece of equipment.

Required:

1. Compute the budgeted cash receipts for Iguana

2. Compute the budgeted cash payments for Iguana

3. Prepare the cash budget for a Kwana. Assume the company can borrow in increments of $1000 to maintain a $10,000 minimum cash balance

Required: Compute the following for Iguana, Inc., for the second quarter (April, May, and June). April May June 2nd Quarter Total 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases 4 Budgeted Direct Labor Cost 5. Budgeted Manufacturing Overhead 6 Budgeted Coat of Goods Sold 7 Total Budgeted Selling and Administrative Expenses Required: 1. Compute the budgeted cash receipts for Iguana. 2. Compute the budgeted cash payments for Iguana. 3. Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000 to mainta balance. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted cash receipts for Iguana. (Do not round your intermediate calculations. Round final answe decimal places.) April May June 2nd Quarter Total Budgeted Cash Receipts Required 2 >

Answer & Explanation Solved by verified expert

See Answer