Need help answering questions 2 and 3 please! lguana, Inc, manufactures bamhoo p

Question

Need help answering questions 2 and 3 please!

lguana, Inc, manufactures bamhoo picture frames that sell for $25 each Fach frame requlres 4 linear feet of bamboo, which costs $200 per foot Fach frame takes appraximately 30 minutes to build, and the labor rate averages $12.00 per hour. Iguana has the following Inventory pollcles: Ending finished goods inventory should be 40 percent of next month's sales Ending raw materlals inventory should be 30 percent of next month's production Expected unlt sales (frames) for the upcoming months follow: March April May June July August 275 250 300 400 375 425 Variable manufacturing overhead is incurred at a rate of $0.30 per unit produced. Annual fixed manufacturing overhead is estimated to be $7,200 (S600 per month) for expected production of 4,000 units for the year. Selling and administratve expenses are estimated at $650 per month plus $060 per unit sold Iguana, Inc., had $10,800 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. or raw materials purchases, 8 0 percent is paid during he month purchased and 20 percent is paid r the follow ng month Raw materials purchases or March to aled S2,000 All other operating costs ?e paid during the month incurred. Manthly fixed manufacturing overhead includes $150 in deprerng April, Iguana plans to pay $3,000 for a piece of equipment

Explanation / Answer

Production Budget April May June July Sales 250 300 400 375 Add Finished goods Ending 120 160 150 170 Less finished goods Openning 100 120 160 150 No of Units Produced 270 340 390 395 Material Purchase Budget April May June July No of Units Produced 270 340 390 395 Raw material Per unit 4 4 4 4 Material Reqired for production 1080 1360 1560 1580 Add Ending Stock of Material 408 468 474 1350 Less Beginning Stock of Material 324 408 468 1200 No of units Purchased 1164 1420 1566 4150 Purchase Rate per unit 2 2 2 2 Total Value of Purchase 2328 2840 3132 8300 Payment for Purchase budget April May June 50% month of Purchase 1164 1420 1566 50% nest month after purchase 1000 1164 1420 Payment for Purchase 2164 2584 2986 Payment For Direct Labor No of Units Produced 270 340 390 Wage Rate 6 6 6 Payment for Wages 1620 2040 2340 April May June 2nd Qarter Total Budgeted Cash Payment 8213.4 6159.5 6870.6 21243.5 April May June 2nd Qarter Total Beginning Cash Balance 10800 10899 10114.5 10800 Plus Budgeted Cash reciptes 6312.4 7375 9750 23437.4 Less Budgeted Cash Payment 8213.4 6159.5 6870.6 21243.5 Preliminary Cash balance 8899 12114.5 12993.9 12993.9 Cash Borrowed /Repaid 2000 -2000 Ending cash Balance 10899 10114.5 12993.9 12993.9

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