Cash he management of Zigby Manufacturing prepared the following balance sheet for March 31. Assets BIGBY MANUFACTURING Balance Sheet March 311 $46,000 Liabilities and Equity Liabilities Accounts receivable 393,960 Accounts payable $ 196,200 Raw materials inventory 96,300 Loan payable Finished goods inventory 327,831 Long-term note payable 18,000 500,000 $ 714,200 Equipment $612,000 Equity Less Accumulate depreciation 156,000 456,000 Common stock 341,000 Retained earnings 264,891 605,891 Total assets $ 1,320,091 Total liabilities and equity $ 1,320,091 To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 20,100 units. Budgeted sales in units follow: April, 20,100; May, 18,900; June, 19,700; and July, 20,100. The product's selling price is $28.00 per unit and its total product cost is $23.30 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 4,815 pounds. The budgeted June 30 ending raw materials inventory is 4,600 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 70% of the next month's budgeted unit sales. The March 31 finished goods inventory is 14,070 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $21 per hour. e. The predetermined variable overhead rate is $3.00 per direct labor hour. Depreciation of $25,437 per month is the only fixed factory overhead item. f. Sales commissions of 6% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,600. g. Monthly general and administrative expenses include $18,000 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). L. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials Pre 3 of 2 Movt