Cash Accounts receivable Raw materials inventory Finished goods inventory The management of Zigby Manufacturing prepared the following balance sheet for March 31. Assets ZIGBY MANUFACTURING Balance Sheet March 31 $ 56,000 Liabilities Liabilities and Equity 382,200 Accounts payable $ 189,800 84,200 Loan payable 28,000 337,680 Long-term note payable 500,000 $ 717,800 Equipment Less: Accumulated depreciation $ 632,000 166,000 Equity 351,000 257,280 Total assets 608,280 $1,326,080 466,000 Common stock Retained earnings $1,326,080 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information a. Sales for March total 21,000 units. Budgeted sales in units follow: April, 21,000; May, 15,800: June, 21,600; and product's selling price is $26.00 per unit and its total product cost is $20.10 per unit. uly, 21,000. The 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 4,210 pounds. The budgeted June 30 ending raw materials inventory is 5,600 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 equal 80% of the next month's budgeted unit sales The March 31 finished goods inventory is 16,800 units. a. Sales for March total 21,000 units. Budgeted sales in units follow: April, 21,000, May, 15,800, June, 21,600, and July, 21,000. The product's selling price is $26.00 per unit and its total product cost is $20.10 per unit. b. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given month's ende materials inventory to equal 50% of the next month's direct materials requirements. The March 31 raw materials inventory is 4,210 pounds. The budgeted June 30 ending raw materials inventory is 5,600 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 equal 80% of the next month's budgeted unit sales The March 31 finished goods inventory is 16,800 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $12 per hour. e. The predetermined variable overhead rate is $4.30 per direct labor hour. Depreciation of $37,960 per month is the only fixed factory overhead item. f. Sales commissions of 7% of sales are paid in the month of the sales. The sales manager's monthly salary is $4,600. g. Monthly general and administrative expenses include $28,000 for administrative salaries and 0.5% monthly interest on the long- term note payable. h. 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) Raw materials i. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materi 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 $56,000. If necessary, the company borrows enough cash using a loan to reac 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 $26,000 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 quart- and budgeted to be paid in the third calendar quarter m. Equipment purchases of $100,000 are budgeted for the last day of June. 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. Selling 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. Sales Cost of goods sold Gross profit ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 Selling, general and administrative expenses Sales commissions expense Sales salaries expense General administrative salaries expense Long-term note interest expense Loan interest expense Total operating expenses LA Total assets ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets 0 Liabilities Liabilities and Equity Equity Total Liabilities and Equity < Req 11 Req 12 >