The following information applies for the questions below) - Ending finished goo
ID: 2513055 • Letter: T
Question
The following information applies for the questions below) - Ending finished goods inventory should be 40 percent of next months sales. - Endinf raw materials inventory should be 30 percent of next months productions.Expect unit sales (frames) for the upcoming months follow:
March - 305 April - 310 May - 360 June - 460 July - 435 August 485
Variable manufacturing overhead is incurred at a rate of $0.40 per unit produced. Annual fixed manufacturing overhead is estimated to be $7200 ($600 per month) for expected production of 4500 units for the year. Selling and administrative expense are estimated at $650 per month plus $0.50 per unit sold.
Iguana, inc., had $13600 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 raw materials purchased, 80 percent is paid for during the month purchased and 20 percent is paid for the following month. Raw material purchases for March 1 totaled $3600. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $210 in depreciation. During April, Iguana plans to pay $3600 for a peice Of equipment. value 33.33 points Required: Compute the following for Iguana, Inc., for the second quarter (April, May, and June) 2nd Quarter Total April May June 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Raw Material Purchases 4. Budgeted Direct Labor Cost 5. Budgeted Manufacturing Overhead 6. Budgeted Cost of Goods Sold 7. Total Budgeted Selling and Adm. Expenses References eBook & Resources
Explanation / Answer
1.Prepartion of Sales Budget April May June Total Sales Unit 310 360 460 1130 Selling Price/Unit $30 $30 $30 $30 Budgeted Sales Value $9,300 $10,800 $13,800 33900 2. Prepartion of Production Budget April May June Total Sales Unit 310 360 460 1130 Add: Ending Inventory (40% of Nex Month Sales) 144 184 174 174 Less Beginning Inventory 124 144 184 124 Production Unit 330 400 450 1180 3. Preparation of Direct Material Purchase Budget April May June Total Production Unit 330 400 450 1180 Raw material Rquired for Prodcution Unit @ 4 Linear Feet 1320 1600 1800 4720 Add: Ending Inventory ( in Feet) 30% of Next Month 480 540 546 546 Less: Beginning Inventory (in Feet) 396 480 540 396 Total Raw Material Purchase ( in Feet) 1404 1660 1806 4870 Cost /Feet $3.50 $3.50 $3.50 $3.50 Cost of Raw Material Purchase $4,914.00 $5,810.00 $6,321.00 $17,045.00 Preparation of Direct Labour Budget April May June Total Quarter-2 Production Unit 330 400 450 1180 Labour Minute Require/Unit 30 30 30 30 Total Labour Minute for Production 9900 12000 13500 35400 Total Labour Hour Required 165 200 225 590 Laour Cost/Hour $12.00 $12.00 $12.00 $12.00 Total Labour Cost $1,980 $2,400 $2,700 $7,080.00 Preparation of Manufacturing Overhead Budget Particular April May June Quarter-2 Total Variable Manufacturing Overhead @0.40 $132.00 $160.00 $180.00 $472.00 Fixed Amnufacturing Overhead $600.00 $600.00 $600.00 $1,800.00 Total $732.00 $760.00 $780.00 $2,272.00 Preparation of Budgeted Cost of Goods Sold Particular April May June Quarter-2 Total Material Cost $4,340 $5,040 $6,300 $15,680 Labour cost $1,860 $2,160 $2,760 $6,780 Variable Manufacturing Overhead @0.40 $132 $160 $180 $472 Fixed Amnufacturing Overhead $600 $600 $600 $1,800 Total $6,932 $7,960 $9,840 $24,732 Preparation of Selling & Administration Expense Budget Particular April May June Quarter-2 Total Variable Selling & Adminstration Expense @0.40 $124.00 $144.00 $184.00 $452.00 Fixed Selling & Adminstration Overhead $650.00 $650.00 $650.00 $1,950.00 Total $774.00 $794.00 $834.00 $2,402.00
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