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 $13 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 March April May June July August 325 350 400 500 475 525 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $6.000 ($500 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $550 per month plus $0.60 per unit sold. Iguana. Incorporated, had $12,000 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 $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $250 in depreciation. During April, Iguana plans to pay $4,000 for a piece of equipment.
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 $13 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 March April May June July August 325 350 400 500 475 525 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $6.000 ($500 per month) for expected production of 5,000 units for the year. Selling and administrative expenses are estimated at $550 per month plus $0.60 per unit sold. Iguana. Incorporated, had $12,000 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 $2,000. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $250 in depreciation. During April, Iguana plans to pay $4,000 for a piece of equipment.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:yuara,
por
Lasi unt au un Apr its sales, ou percent is i Losi. On e Liquil baits, u
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 $2,000. All other operating costs are paid during the month
incurred. Monthly fixed manufacturing overhead includes $250 in depreciation. During April, Iguana plans to pay $4,000
for a piece of equipment.
Required:
Complete Iguana's budgeted income statement for quarter 2.
Note: Round cost per unit in intermediate calculations to 2 decimal places.
Budgeted Gross Margin
Budgeted Net Operating Income
IGUANA, INCORPORATED
Budgeted Income Statement
For the Quarter Ending June
April
May
June
2nd Quarter
Total
Transcribed Image Text:Itranscript
Required information
[The following information applies to the questions displayed below)
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 $13
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:
.
March
April
May
June
July
August
Skip to question
325
350
400
5:00
475
525
Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is
estimated to be $6.000 ($500 per month) for expected production of 5,000 units for the year. Selling and administrative
expenses are estimated at $550 per month plus $0.60 per unit sold.
iguana, Incorporated, had $12,000 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 $2,000. All other operating costs are paid during the month
incurred. Monthly fixed manufacturing overhead includes $250 in depreciation. During April, Iguana plans to pay $4,000
for a piece of equipment.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education