Assets Cash $ 48,000

Accounts receivable 438,750

Raw materials inventory 87,900

Finished goods inventory 383,760

Total current assets 958,410

Equipment, gross 616,000

Accumulated depreciation (158,000)

Equipment, net 458,000

Total assets $ 1,416,410

Liabilities and Equity Accounts payable 187,200

Short-term notes payable 20,000

Total current liabilities $ 207,200

Long-term note payable 508,000

Total liabilities 715,200

Common stock 343,000

Retained earnings 358,210

Total stockholders equity 701,210

Total liabilities and equity $ 1,416,410

To prepare a master budget for April, May, and June of 2015, management gathers the following information.

a. Sales for March total 19,500 units. Forecasted sales in units are as follows: April, 19,500; May, 17,100; June, 21,300; July, 19,500. Sales of 248,000 units are forecasted for the entire year. The products selling price is $30.00 per unit and its total product cost is $24.60 per unit.

b. Company policy calls for a given months ending raw materials inventory to equal 50% of the next months materials requirements. The March 31 raw materials inventory is 4,395 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,800 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials.

c. Company policy calls for a given months ending finished goods inventory to equal 80% of the next months expected unit sales. The March 31 finished goods inventory is 15,600 units, which complies with the policy.

d. Each finished unit requires 0.50 hours of direct labor at a rate of $23 per hour.

e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.40 per direct labor hour. Depreciation of $27,020 per month is treated as fixed factory overhead.

f. Sales representatives commissions are 7% of sales and are paid in the month of the sales. The sales managers monthly salary is $3,800.

g. Monthly general and administrative expenses include $20,000 administrative salaries and 0.5% monthly interest on the long-term note payable.

h. The company expects 25% of sales to be for cash and the remaining 75% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of the sale).

i. All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month.

J. The minimum ending cash balance for all months is $48,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.

K. Dividends of $18,000 are to be declared and paid in May.

l. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter.

m. Equipment purchases of $138,000 are budgeted for the last day of June.

Required: Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar:

I need help with the raw materials budget along with the cash budget. I am having a bit of errors.

thank you

Problem 20-7A Part 3 3. Raw materials budget. (Round Materials requirements per unit answers to 2 decimal places.) ZIGBY MANUFACTURING Raw Materials Budget April, May, and June 2013 April May June Production budget (units) Materials needed for production Total materials requirements (units) Materials to be purchased Material price per unit Total cost of direct material purchases