The following information applies to the questions displayed below guana, Inc.,
ID: 2517059 • Letter: T
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The following information applies to the questions displayed below guana, 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 o build, and the labor rate averages $13 per hour Iguana has the following inventory policies Ending finished goods inventory should be 40 percent of next month's sales Ending raw masterials inventory should be 30 percent of next month's production Expected unit sales (frames) for the upcoming months follow March Apri May June July August 310 320 370 470 445 495 Variable manufacturing overheed is incurred at a rate of $O 50 per unit produced Annusl fixed manufacturing overhead is estimated to be $4,800 (5400 per monthj for expected production of 4,800 units for the year Selling and administrative expenses are estimated at $500 per month plus SO 50 per unit sold Iguana, Inc. had S10.500 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 colected Of rew materials purchases, 80 percent is paid for during the month purchased and 20 percent is paid in the following month Raw materials purchases for March 1 sotaled $2200 A during the month following the sale other operating costs are paid during the month incurred Monthly fixed manufacturing overhead inckudes $220 in deprecistion During April, Iquana plans to pay $3,700 for a piece ofExplanation / Answer
Answer 1. Sales Budget April May June Total Sales in Units 320 370 470 1,160 Sp Per Unit 25 25 25 25 Total Sales in $ 8,000 9,250 11,750 29,000 Answer 2. Frame Production Budget April May June Total Sales In units 320 370 470 1,160 Add: Closing Inventory in units 148 188 178 178 Total Needs 468 558 648 1,338 Less: opening Inventory in uints (128) (148) (188) (128) Required Production in Units 340 410 460 1,210 Answer 3. Raw Material Purchase Budget April May June Total Required Production in Units 340 410 460 1,210 Bamboo required per Unit in Feet 4 4 4 4 Total Bamboo required for Production 1,360 1,640 1,840 4,840 Add: Closing Raw Material Inventory 492 552 558 558 Total Needs 1,852 2,192 2,398 5,398 Less: opening Inventory in feets (408) (492) (552) (408) Raw Material Purchased in feets 1,444 1,700 1,846 4,990 Cost of raw Material per feet 2.00 2.00 2.00 2.00 Cost of raw Material Purchased 2,888 3,400 3,692 9,980 Answer 4. Budgeted Direct Labor Costs April May June Total Required Production in Units 340 410 460 1,210 Lab. Hour required per unit 0.50 0.50 0.50 0.50 Total Labor Hours Required 170 205 230 605 Lab. Rate per Hour 13 13 13 13 Budgeted Direct Labor Costs 2,210 2,665 2,990 7,865 Answer 5. Budgeted Manufacturing Overhead April May June Total Required Production in Units 340 410 460 1,210 Variable MOH per Unit 0.50 0.50 0.50 0.50 Total Variable MOH 170 205 230 605 Fixed MOH Depreciation 220 220 220 660 Other MOH 180 180 180 540 Total Fixed MOH 400 400 400 1,200 Total MOH 570 605 630 1,805 Answer 6. Budgeted Manufacturing Costs per Unit: Direct Materials - 4 Ft. X $2 8.00 Direct Labor - 0.50 Hrs X $13 6.50 Variable MOH 0.50 Fixed MOH - $4,800 / 4,800 Units 1.00 Total Budgted Manufacturing Cost per Unit 16.00 Budgeted Cost of Goods Sold April May June Total No. Of Units Sold 320 370 470 1,160 Total Budgted Manufacturing Cost per Unit 16 16 16 16 Budgeted Cost of Goods Sold 5,120 5,920 7,520 18,560 Answer 7. Total Budgetd Selling & Admn. Expenses April May June Total No. Of Units Sold 320 370 470 1,160 Variable Selling & Admn. Exp. Per Unit 0.50 0.50 0.50 0.50 Total Variable selling & Admn. Exp. 160 185 235 580 Fixed selling & Admn. Exp. 500 500 500 1,500 Total selling & Admn. Exp. 660 685 735 2,080
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