PA8-3 Preparing Cash Budget [LO 8-4]Iguana, 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 to build, and the labor rate averages $20.00 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. Expected unit sales (frames) for the upcoming months follow: March 385 April 360 May 410 June 510 July 485 August 535 Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,200 ($700 per month) for the expected production of 3,000 units for the year. Selling and administrative expenses are estimated at $760 per month plus $0.50 per unit sold. Iguana, Inc., had $11,900 cash on hand on April 1… Of its sales, 80 percent is in cash.

Of the credit sales, 50% is collected during the month of the sale, and 50% 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 $3,100. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $260 in depreciation. During April, Iguana plans to pay $4,100 for a piece of equipment. Required:1.Compute the budgeted cash receipts for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.) 2.Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.) 3.Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000.00 to maintain a $10,000.00 minimum cash balance.PA8-3 Preparing Cash Budget [LO 8-4]Iguana, 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 to build, and the labor rate averages $20.00 per hour. Iguana has the following inventory policies: Variable manufacturing overhead is incurred at a rate of $0.20 per unit produced. Annual fixed manufacturing overhead is estimated to be $4,200 ($700 per month) for expected production of 3,000 units for the year. Selling and administrative expenses are estimated at $760 per month plus $0.50 per unit sold. Iguana, Inc., had $11,900 cash on hand on April 1… Of its sales, 80 percent is in cash. Of the credit sales, 50% is collected during the month of the sale, and 50% 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 $3,100. All other operating costs are paid during the month incurred. Monthly fixed manufacturing overhead includes $260 in depreciation. During April, Iguana plans to pay $4,100 for a piece of equipment. Compute the budgeted cash receipts for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.) Compute the budgeted cash payments for Iguana. (Do not round your intermediate calculations. Round final answers to 2 decimal places.) Prepare the cash budget for Iguana. Assume the company can borrow in increments of $1,000.00 to maintain a $10,000.00 minimum cash balance.