IGUANA. INC

ws5_a4.xls

PA

0

< /

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8

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01

Sales budget

0 0 0 0

Production budget

April May June 2nd Quarter
Budgeted sales (units)

0 0 0 0

Raw materials purchases budget

April May June 2nd Quarter
Budgeted production

0 0 0 0

:

budget

April May June 2nd Quarter

Budgeted production – – – –

0 0 0 0

cost budget

April May June 2nd Quarter
Budgeted production

rate

manufacturing overhead

0 0 0 0

Direct labor
Variable manufacturing overhead

Fixed manufacturing overhead

0

April May June 2nd Quarter
Budgeted sales (units)
Budgeted manufacturing cost per unit

Budgeted cost of goods sold

0 0 0 0

April May June 2nd Quarter
Budgeted sales (units)

0 0 0 0

Student Name:

Class:

Problem 08-01

IGUANA, INC.

Requirement 1:

April

May

June

2nd Quarter

Budgeted sales (units)

Unit sales price

Budgeted sales revenue

Requirement 2:

Ending finished goods inventory

Beginning finished goods inventory

Budgeted production

Requirement 3:

Material requirements per unit

Total material needed for production

Ending raw materials inventory

Beginning raw materials inventory

Budgeted raw materials purchases

Material cost per foot

Budgeted cost of raw materials purchases

Requirement

4

Direct labor

Direct labor requirements per unit

Direct labor hours required

Direct labor rate

Budgeted direct labor cost

Requirement 5:

Manufacturing overhead

Variable manufacturing overhead

Budgeted variable manufacturing

Fixed

Budgeted manufacturing overhead

Requirement 6:

Budgeted cost of goods sold

Budgeted Manufacturing Costs

Per Unit

Direct materials

Budgeted manufacturing cost per unit

Requirement 7: Selling and administrative expense budget

Variable selling and administrative rate

Budgeted variable selling and administrative expenses

Budgeted fixed selling and administrative expenses

Total budgeted selling and administrative expenses

Given PA08-01

IGUANA, INC.

4

2.00

Fixed

April

May

June

Given Data PA08-01:
		General information:
		Selling price of picture frames			$ 25.00
		Linear feet of bamboo required per frame
		Cost of bamboo per foot			$ 2.00
		Hours required to build			0.50
		Average hourly labor rate				$ 1
				Additional information:
		Ending finished goods inventory should be 40 percent of the next month’s sales
		Ending raw materials inventory should be 30 percent of the next month’s production
		Variable manufacturing overhead rate per unit produced			$ 0.30
		Estimated annual fixed manufacturing overhead			$ 7,200
		Expected units of production			4,000
		Estimated monthly selling and administrative expenses:
		$ 650
		Per unit sold			$ 0.60
		Expected number of frames sold in following months:
		March			275
		250
		300
		400
		July			375
		August			425

PA08-02

Student Name:
Class:

IGUANA, INC.

April May June 2nd Quarter

Budgeted sales revenue

0

$ – 0 $ – 0

– 0 – 0 – 0 – 0

– 0 – 0 – 0 – 0

– 0 – 0 – 0 – 0

$ – 0 $ – 0 $ – 0 $ – 0

Try again! Try again! Try again!

Problem 08-02

Requirement 1: Budgeted Income Statement

$

– 0

$ –

Less: Budgeted cost of goods sold

Budgeted gross margin

Less: Budgeted selling and administrative expenses

Budgeted net income

Try again!

Given PA08-02

IGUANA, INC.
General information:
Selling price of picture frames $ 25.00
Linear feet of bamboo required per frame 4
Cost of bamboo per foot $ 2.00
Hours required to build 0.50
Average hourly labor rate $ 12.00
Additional information:
Ending finished goods inventory should be 40 percent of the next month’s sales
Ending raw materials inventory should be 30 percent of the next month’s production
Variable manufacturing overhead rate per unit produced $ 0.30
Estimated annual fixed manufacturing overhead $ 7,200
Expected units of production 4,000
Estimated monthly selling and administrative expenses:
Fixed $ 650
Per unit sold $ 0.60
Expected number of frames sold in following months:
March 275
April 250
May 300
June 400
July 375
August 425

Given Data PA08-02:

PA08-03

Student Name:
Class:

IGUANA, INC.

April May June 2nd Quarter
Budgeted sales revenue

0 0 0 0

April May June 2nd Quarter

Budgeted raw materials purchases $ – 0 $ – 0 $ – 0 $ – 0

Direct labor

Manufacturing overhead

0 0 0 0

April May June 2nd Quarter

0 0 0 0

Problem 08-03

Requirement 1: Budget cash receipts

Cash collections

Credit collections (current month)

Credit collections (following month)

Budgeted cash receipts

Requirement 2: Budget cash disbursements

Cash disbursements

Raw material purchases (current month)

Raw material purchases (prior month)

Less: Depreciation

Selling and administrative expenses

Purchase of equipment

Total budgeted cash payments

Requirement 3: Cash budget for Quarter 2

Beginning cash balance

Plus: Budget cash receipts

Less: Budgeted cash payments

Preliminary cash balance

Cash borrowed/Repaid

Ending cash balance

Given PA08-03

IGUANA, INC.
General information:
Selling price of picture frames $ 25.00
Linear feet of bamboo required per frame 4
Cost of bamboo per foot $ 2.00
Hours required to build 0.50
Average hourly labor rate $ 12.00
Additional information:
Ending finished goods inventory should be 40 percent of the next month’s sales
Ending raw materials inventory should be 30 percent of the next month’s production
Variable manufacturing overhead rate per unit produced $ 0.30
Estimated annual fixed manufacturing overhead $ 7,200
Expected units of production 4,000
Estimated monthly selling and administrative expenses:
Fixed $ 650
Per unit sold $ 0.60
Expected number of frames sold in following months:
March 275
April 250
May 300
June 400
July 375
August 425

,800

50%

80%

Given Data PA08-03:
Information for Problem PA08-03:
Cash on hand at April 1	$						10
Percentage of sales in cash		80%
Percentage of credit sales collected during month of sale		50%
Percentage of credit sales collected in month following sale
Percentage of direct material purchases paid in month purchased
Percentage of direct material purchases paid in following month	20%
March 1 raw materials purchases	$ 2,000
Depreciation included in monthly fixed manufacturing overhead	$ 150
Amount expected to be paid for a piece of equipment	$ 3,000
Minimum cash balance required	$	10,000
Borrowing increments	$ 1,000

PA11-01

Student Name:
Class:

Requirement 1:

/

/
0
Requirement 2:
Name of Variable #1 Operator Name of Variable #2 Operator

=

/

Cash flow

Amount of Variable #1 Amount of Variable #2

/ 0

Result

0

Requirement 3:
Annual

0

10

$ –

Try again!

Annual PV Factor Present

Year Cash Flow

Value

0
1-10
10
NPV $ –
Try again!

Requirement 5:

Problem 11-01

BALLOONS BY SUNSET

Name of Variable #1

Operator

Name of Variable #2

Accounting Rate of Return

=

Net Income

Initial Invesment

Amount of Variable #1

Amount of Variable #2

Result

0.0%

Name of Variable #3

Payback Period

Initial Investment

Annual

Amount of Variable #3

0.00

years

PV Factor

Present

Year

Cash Flow

11%

Value

1-10

NPV

Requirement 4:

15%

If the company required rate of return is 11% then the project is acceptable as it has positive NPV and if it is 15%, then the project is not acceptable as it has negative NPV.

Round to nearest whole unit using Excel’s ROUND function
Round to nearest whole unit using Excel’s ROUND function
Select correct operator from drop-down list

Given PA11-01

BALLOONS BY SUNSET

(for two hot air balloons)

10

11%

Additional information:

15%

Given Data PA11-01:
	Investment information:
	Initial investment	$ 420,000
	Useful life
	Salvage value	$ 50,000
	Annual net income generated	$ 37,800
HAH’s cost of capital
	Cost of capital for Requirement 4

PA11-04

Student Name:
Class:

Requirement 1:
Name of Variable #1 Operator Name of Variable #2

Accounting Rate of Return = Net Income / Initial Investment

Amount of Variable #1 Amount of Variable #2
/
Result

0
Requirement 2:
Name of Variable #1 Operator Name of Variable #2 Operator Name of Variable #3
Payback Period = Initial Investment /

Amount of Variable #1 Amount of Variable #2
/ 0
Result
0.00 years
0
Requirement 3:
Annual PV Factor Present

Year Cash Flow

Value

0
1-10
10
NPV $ –
Try again!
Requirement 4:
Annual PV Factor Present

Year Cash Flow

Value

0 $ – $ 1 $ –
1-10

10 10,000

NPV

Try again!
Requirement 5:

Problem 11-04
	FALCON CREST ACES, INC.
0.00%
Annual Cash flow
	10%
	6%
14,200	7.3601	104,513
0.5584	5,584
$ 110,097
The company shoule not accept the project if the cost of capital is 10%, but even at 6% it should not be accepted as the NPV is postiive but very small, any change in cashflows might put the NPV in negative.

Round to nearest whole unit using Excel’s ROUND function
Round to nearest whole unit using Excel’s ROUND function
Select correct operator from drop-down list

Given PA11-04

FALCON CREST ACES, INC.
Investment information:

Initial investment

Useful life 10

Salvage value

Annual net income generated

10%

Additional information:

Cost of capital for Requirement 4 6%

Given Data PA11-04:

$ 110,000

$ 10,000

$ 4,200

WWA’s cost of capital