11 16 points Sed Problem 7-4A (Static) Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following balance sheet for March 31 STORY MANUFACTURING Balance sheet March 31 Assets Liabilities and Equity $40.000 Liabilities Accounts receivable 344,400 Accounts payable $ 201,000 Raw materiale inventory 98,500 Loan payable 12.000 Fished goods inventory 325,540 Long-ter note payable 500.000 Equipment 600.000 Equity Les Acculated depreciation 150.000 450.000 Common stock 335,000 Retained earnings 210, 440 Total acts 3125 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information Cash $ 733,000 545,440 a. Sales for March total 20,500 units. Budgeted sales in units follow. April, 20,600May 18.500: June, 20,000; and July, 20,500 The product's selling price is $24.00 per unit and its total product cost is $19.85 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ending materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4.925 pounds. The budgeted June 30 ending raw materials inventory is 4.000 pounds. Each finished unit requires 0.50 pound of direct materials c. Company policy calls for a given month's ending finished goods inventory to equat 80% of the next month's budgeted unit sales. The March 31 finished goods Inventory is 16.400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour e. The predetermined variable overhead rate is $2.70 per direct labor hout. Depreciation of $20,000 per month is the only fixed factory overhead item t. Sales commissions of ex of sales are paid in the month of the sales. The sales manager's monthly salary is $3,000 g. Monthly general and administrative expenses include $12,000 for administrative salaries and 0.9% monthly interest on the long term note payable 11 16 ponts 1. DIES LUSIVIDUI OUI DIE poi urem Me Se Hayes Hy Scity,UVU. 9. Monthly general and administrative expenses include $12,000 for administrative salaries and 0.9% monthly interest on the long- term note payable n. The company budgets 30% of sales to be for cash and the remaining 70% on credit Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale) 1. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials, purchases are fully paid in the next month (none are paid in the month of purchase) J. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $10,000 are budgeted to be declared and paid in May. 1. No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. m. Equipment purchases of $100.000 are budgeted for the last day of June. Sipped wok Required: Prepare the following budgets for the months of April, May, and June: 1. Sales budget 2. Production budget 3. Direct materials budget 4. Direct labor budget. 5. Factory overhead budget 6. Seling expense budget 7. General and administrative expense budget. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials 10. Cash budget 11. Budgeted income statement for entire second quarter (not monthly), 12. Budgeted balance sheet at June 30, Complete this question by entering your answers in the tabs below