Prepare the following components of the operating budget: Budgeted income statem
ID: 2474654 • Letter: P
Question
Prepare the following components of the operating budget: Budgeted income statement.
lguana, Inc., manufactures bamboo picture frames that sell for $22 each. Each frame requires 3 linear feet of bamboo, which costs $1.50 per foot. Each frame takes approximately 36 minutes to build, and the labor rate averages $9.00 per hour. Iguana has the following inventory policies Ending finished goods inventory should be 30 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: 290 250 310 410 380 420 March ril May August Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $6,900 ($575 per month) for expected production of 4,036 units for the year. Selling and administrative expenses are estimated at $670 per month plus $0.50 per unit sold Required Complete lguana's budgeted income statement for quarter 2. (Round cost per unit and final answers to 2 decimal places.) IGUANA INC Budgeted Income Statement For the Quarter Ending June April 2nd Quarter Total May June Budgeted Gross Margin Budgeted Net Operating IncomeExplanation / Answer
Working For the Qtr Ending June April May June No.of sales N 250 310 410 Sale price per unit 22 22 22 Budgeted Sales $5500 6820 9020 Budgeted Cost of Good Sold Direct material to be used 3 3 3 Rate per linear feet bamboo 1.5 1.5 1.5 Direct material per unit D 4.5 4.5 4.5 Direct Material (N*D) 1125 1395 1845 Direct Labor used 36/60 min 0.6 0.6 0.6 Direct labour per hour rate 9 9 9 Direct Labour per unit L 5.4 5.4 5.4 Direct Labour used N*L 1350 1674 2214 Variable Manufacturing overhead per unit 0.3 0.3 0.3 Variable Manufacturing overhead 75 93 123 Fixed Expenses 575 575 575 Cost of good sold Direct Material (N*D) 1125 1395 1845 Direct Labour used N*L 1350 1674 2214 Variable Manufacturing overhead 75 93 123 Fixed Manufacturing Expenses 575 575 575 Budgeted Cost of good sold 3125 3737 4757 Budgeted Income Statement For the Qtr Ending June April May June Total No.of sales N 250 310 410 Sale price per unit 22 22 22 Budgeted Sales 5500 6820 9020 21340 Budgeted Cost of good sold 3125 3737 4757 11619 Budgeted Gross margin 2375 3083 4263 9721 Less: Budgeted Selling and Administrative expenses Variable 125 155 205 485 Fixed 670 670 670 2010 : Budgeted Selling and Administrative expenses 795 825 875 2495 Budgeted Net Operating Income 1580 2258 3388 7226