# Question & Answer: Iguana, Inc., manufactures bamboo picture frames that sell for \$20 each. Each frame requires 4 lin…..

Iguana, Inc., manufactures bamboo picture frames that sell for \$20 each. Each frame requires 4 linear feet of bamboo, which costs \$1.50 per foot. Each frame takes approximately 30 minutes to build, and the labor rate averages \$12 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.

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Question & Answer: Iguana, Inc., manufactures bamboo picture frames that sell for \$20 each. Each frame requires 4 lin…..
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Expected unit sales (frames) for the upcoming months follow:

March=360
April=420
May=470
June=570
July=545
August=595

Variable manufacturing overhead is incurred at a rate of \$0.20 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 \$0.50 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.

Of raw 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 totaled \$2,400. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes \$320 in depreciation. During April, Iguana plans to pay \$4,100 for a piece of equipment.

Hey guys, I typed out the question but I need help with the 2 following questions, the budgeted cash payment and a cash budget. It would be great if someone could help me out with this. Thanks! (if you cannot see the image, right click and select “open in new window”)

2. Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.) May 2nd Quarter T Budgeled Cash Payments 0.00 3. Prepare the cash budget for lguana. Assume the company can borrow in increments or S1,000 to maintain a \$10,000 minimum cash balance. (Leave no cell blank enter “o” wherever required. Round your answers to 2 decimal places.) May 2nd Quarter Total 10,800.00 28,780.0U 0.00 April June Beginning Cash Balance Pus. Budgeted Cash Receipts Luss Budgeted Cash Payments Praliminary Cash Balance Cash Borrowed / Repaid Ending Cash Balanca S 10.800.00 8280.00 9,300 00 11,200.0