Required: Complete Iguana's budgeted income statement for quarter 2. (Round C 2 decimal places.)
Required: Complete Iguana's budgeted income statement for quarter 2. (Round C 2 decimal places.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Question
Oo.8.
Subject :- Account
![Required information
[The following information applies to the questions displayed below.]
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo,
which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 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
Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is
estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative
expenses are estimated at $650 per month plus $0.50 per unit sold.
320
340
390
490
465
515
Iguana, Inc., had $10,500 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 $240 in depreciation. During April, Iguana plans to pay $2,000
for a piece of equipment.
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 Gross Margin
Budgeted Net Operating Income
IGUANA, INC.
Budgeted Income Statement
For the Quarter Ending June
April
$
$
0.00 $
0.00 $
May
0.00 $
0.00 $
June
2nd Quarter
Total
0.00 $
0.00 $
0.00
0.00](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5a79f5fd-2bdd-484b-9c0d-a83d48b55247%2Fdd2079b0-a900-481a-944a-11239fb02a5b%2Fzwg7qh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each frame requires 4 linear feet of bamboo,
which costs $3.00 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $12 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
Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is
estimated to be $7,200 ($600 per month) for expected production of 4,000 units for the year. Selling and administrative
expenses are estimated at $650 per month plus $0.50 per unit sold.
320
340
390
490
465
515
Iguana, Inc., had $10,500 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 $240 in depreciation. During April, Iguana plans to pay $2,000
for a piece of equipment.
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 Gross Margin
Budgeted Net Operating Income
IGUANA, INC.
Budgeted Income Statement
For the Quarter Ending June
April
$
$
0.00 $
0.00 $
May
0.00 $
0.00 $
June
2nd Quarter
Total
0.00 $
0.00 $
0.00
0.00
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