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Iguana, Incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 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 365 430 May 480 June 580 July August 555 605 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,800 ($400 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $450 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,000 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 $3,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $330 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment. Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases 5. Budgeted Manufacturing Overhead 4. Budgeted Direct Labor Cost 6. Budgeted Cost of Goods Sold 7. Total Budgeted Selling and Administrative Expense 2nd Quarter April May June Total $ 8,600 $ 9,600 $ 11,600 $ 29,800 0 $ 0 $ 0 $ 0 $ 0 $ 0

Iguana, Incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 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 365 430 May 480 June 580 July August 555 605 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,800 ($400 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $450 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,000 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 $3,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $330 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment. Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases 5. Budgeted Manufacturing Overhead 4. Budgeted Direct Labor Cost 6. Budgeted Cost of Goods Sold 7. Total Budgeted Selling and Administrative Expense 2nd Quarter April May June Total $ 8,600 $ 9,600 $ 11,600 $ 29,800 0 $ 0 $ 0 $ 0 $ 0 $ 0

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Iguana, Incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 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 365 430 May 480 June 580 July August 555 605 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,800 ($400 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $450 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,000 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 $3,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $330 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment. Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases 5. Budgeted Manufacturing Overhead 4. Budgeted Direct Labor Cost 6. Budgeted Cost of Goods Sold 7. Total Budgeted Selling and Administrative Expense 2nd Quarter April May June Total $ 8,600 $ 9,600 $ 11,600 $ 29,800 0 $ 0 $ 0 $ 0 $ 0 $ 0
Transcribed Image Text:Iguana, Incorporated, manufactures bamboo picture frames that sell for $20 each. Each frame requires 4 linear feet of bamboo, which costs $2.00 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 365 430 May 480 June 580 July August 555 605 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,800 ($400 per month) for expected production of 4,000 units for the year. Selling and administrative expenses are estimated at $450 per month plus $0.50 per unit sold. Iguana, Incorporated, had $11,000 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 $3,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $330 in depreciation. During April, Iguana plans to pay $2,000 for a piece of equipment. Required: Compute the following for Iguana, Incorporated, for the second quarter (April, May, and June). 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Material Purchases 5. Budgeted Manufacturing Overhead 4. Budgeted Direct Labor Cost 6. Budgeted Cost of Goods Sold 7. Total Budgeted Selling and Administrative Expense 2nd Quarter April May June Total $ 8,600 $ 9,600 $ 11,600 $ 29,800 0 $ 0 $ 0 $ 0 $ 0 $ 0
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