Iguana, Inc., manufactures bamboo picture frames that sell for $25 each. Each fr
ID: 2559963 • Letter: I
Question
Iguana, Inc., manufactures bamboo picture frames that sell for $25 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 $12.00 per hour. Iguana has the following inventory policies Ending finished goods inventory should be 40 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: 275 250 300 400 375 425 March ril May June July August Variable manufacturing overhead is incurred at a rate of S0.30 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 S0.60 per unit sold Required Compute the following for lguana, Inc., for the second quarter(Apil, May, and June) 2nd Quarter May June ri Total 1. 2. 3. 4. 5. 6. 7. Budgeted Sales Revenue Budgeted Production in Units Budgeted Cost of Raw Material Purchases Budgeted Direct Labor Cost Budgeted Manufacturing Overhead Budgeted Cost of Goods Sold Total Budgeted Selling and Adm. Expenses 6,250 $ 270 2,328 S 1,620 S 7,500 $ 10,000S 23,750 1,000 8,300 6,000 702.0717.00 2,100.00 340 2,840 S 2,040 S 390 3,132S 2,340 S $ $ 681.00Explanation / Answer
Budgeted Cost of goods Sold: April May June Q2 Budgted Sales Unit A 250 300 400 950 Budgted Manufacturing Cost B (see working below) 16.1 16.1 16.1 16.1 Budgted Cost of goods Sold A*B 4025 4830 6440 15295 Working for Budgeted Manufacturing Cost: Material Cost (4 feet *2 per foot) 8 Labor (0.5 hour *12 per hour) 6 Variable Manufacturing 0.3 Fixed Manufacturing (7200/4000) 1.8 Total 16.1 Budgeted selling and administrative cost: April May June Q2 Budgted Sales Unit A 250 300 400 950 Variable Selling cost B 0.6 0.6 0.6 0.6 Total Variable Cost of Sellign and admin C=(A*B) 150 180 240 570 Fixed cost D 650 650 650 1950 Total Budgeted Cost (C+D) 800 830 890 2520