Iguana, Inc., manufactures bamboo picture frames that sell for $21 each. Each fr
ID: 2468720 • Letter: I
Question
Iguana, Inc., manufactures bamboo picture frames that sell for $21 each. Each frame requires 4 linear feet of bamboo, which costs $2.20 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages $11.00 per hour. Iguana has the following inventory policies: Ending finished goods inventory should be 50 percent of next month's sales. Ending raw materials inventory should be 30 percent of next month's production. Expected unit sales (frames) for the upcoming months follow: Variable manufacturing overhead is incurred at a rate of $.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $6,900.00 ($575.00 per month) for expected production of 4,080 units for the year. Selling and administrative expenses are estimated at $620.00 per month plus $.60 per unit sold. Required: Compute the following for Iguana, Inc., for the second quarter (April, May, and June). (Round your dollar amounts to 2 decimal places and your per unit amounts to the nearest whole number. Round intermediate calculations to 1 decimal place for direct labor hours and to 2 decimal places for per unit costs.)Explanation / Answer
2) Budgeted production in units - Data of March and July has been included herewith for your reference of closing and opening inventory.
355
3) Budgeted Cost of Raw material purchase - Data of March and July has been included herewith for your reference of closing and opening inventory.
4 Budgeted Direct LAbor cost
1 ) sales revenue budget April May June Total Sale units 260 300 410 970 Sale revenue ( $ 21 per unit) 5460 6300 8610 20370