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The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015: Estimated Balance Sheet March 31, 2015 Assets Cash S 65.000 434.850 Accounts receivable Raw materials inventory Finished goods inventory 374,640 Total current ossets 961,995 Equipment, gross Accumulated depreciation 624,000 (162,000) Equipment, net 462,000 Total assets 1,423,995 Liabilities and Equity able 199.405 24,000 Accounts pay Short-term notes payable Total current liabilities S 223.405 520,000 Long-term note payable Total liabilities Common stock 743.405 347000 Retained 333.590 Total stockholders' equity 680,590 Total liabilities and equity 1,423,995 To prepare a master budget for April, May, and June of 2015, management gathers the following information. a. Sales for March total 22,300 units. Forecasted sales in units are os follows: April, 22,300; May. 16,300; June, 22,700: July. 22,.300. Sales of 252,000 units are forecasted for the entire year. The product's selling price is $26.00 per unit and its total product cost is $21.00 per unit. b. Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's materials requirements. The March 31 row materials inventory is 4,375 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5.200 units. Raw materials cost $20 per unit Each finished unit requires C. Company policy calls for given month's ending finished goods inventory to equal 80% of the next month's expected unit sales. The March 31 finished goods inventory is 17,840 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overheed rate is $3.90 per cdirect labor hour. Depreciation of $31,670 per month is treated as fixed factory overhead. f Sales representatives' commissions are 10% of sales and are paid in the month ofthe sales. The sales g. Monthly general ond administrative expenses include $24,000 administrative salaries and 0.9% 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). L All raw materials purchases are on credit, and no payables arise from any other transactions. One month's row materials purchases are fully paid in the next month. J. The minimum ending cosh balance for all months is $62,000. If necessary, the company borrows enough cash using o short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repoyrment)lf the ending cosh balance exceeds the minimum, the excess will payable balonce K. Dividends of $22,000 are to be declared and paid in May. L No cosh payments for income taxes are to be made during the second colendor quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter. m. Equipment purchases of $142,000 are budgeted for the last dey of June. Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the secondl calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the omount of cash sales, which should be rounded down to the neprest whole dollar 1. Sales budget. Answer is complete and correct. ZIGBY MANUFACTURING Sales Budget April, May, and June 2015 Budgeted Budgeted Unit Price Budgetec Unit Sales Total 2,300s 28.00 579,800 April 2015 16,30028.00 May 2015 423,800 22,700 June 2015 28.00 590,200 61,300 1,593,800 Totals for the quarter 2. Production budget. Answer is complete and correct. ZIGBY MANUFACTURING Production Budget April, May, and June 2015 May June Total Next month's budgeted sales (units) 16,300 22,700 22,300 Ratio of inventory to future sales 80% 80% 80% 13,040 Budgeted ending inventory (units) 18,160 17,840 16,300 22,700 22,300 Budgeted units sales for month Required units of available production 35,340 34,460 40,540 13,040 Beginning inventory (units) 17,840 18,160 17,500 22.38001 61.300 21.420 Units to be produced 3. Raw materials budget. Answer is complete and correct. ZIGBY MANUFACTURING Raw Materials Budget April, May, and June 2015 Total April May June 17,500 21,420 22,380 Production budget (units) 0.50 Materials requirements per unit 0.50 0.50 Materials needed for production 8,750 10,710 11,190 5,200 Budgeted ending inventory 5,355 5,595 Total materials requirements (units) 14,105 16,305 16,390 5,505 Beginning inventory 4,375 5,355 10,950 10,75 31,475 9,730 Materials to be purchased 20 20 20 Material 20 pice per unit Total cost of direct material 194,600 219,000 215,900 629,500 purchases 4. Direct labor budget Answer is complete and correct. ZIGBY MANUFACTURING Direct Labor Budget April, May, and June 2015 Total April May June 17,500 21,420 Budgeted production (units) 22.380 Labor requirements per unit (hours) 0.50 0.50 0.50 8,750 10,710 11,30,850 Total labor hours needed 11,190 15S 15 Labor rate (per hour) 131,250 160,650 167,850 459,750 Labor dollars 5. Factory overhead budget. Answer is complete and correct. ZIGBY MANUFACTURING Factory Overhead Budget April, May, and June 2015 Total April May June 11,180 0,710 Labor hours needed 8,750 3.90 3.90 3.90 Variable factory overhead rate Budgeted variable overhead 34,125 41,769 43,641 119,535 31,670 31,67031,670 95,010 Budgeted foced overhead 75,311 65,795 73,439 214,545 Budgeted total overhead Selling expense budget Answer is not complete. ZGBY MANUFACTURING Selling Expense Budget April, May, and June 2015 May June April 579.800S 423.800S 590.200 Budgeted sales Sales commission percent 7. General and administrative expense budget ZIGBY MANUFACTURIN3 General and Administrative Expense Budgets April, May, and June 2015 April May June Total expenses 8. Cash budget. (Negative balance and Loan repayment amount should be indicated with minus sign. Round your answers to 2 decimal places.) Answer is complete but not entirely correct. Calculation of Cash receipts from customers April May 57,800 423,800 s 590,200 Total budgeted sales 44,50 105,950147,550 Cash sales 25% 434,850S 317,850 75% 442,650 Sales on credit Total cash receipts from customers April May 434,850S 434,850S 317,850 Current month's cash sales Collections of receivables 144,950 105,950 147,550 Total cash receipts 579,800 540,800 465,400 Answer is not complete. ZIGBY MANUFACTURING Cash Budget April, May, and June 2015 May June April Beginning cash balance Total cash available Cash disbursements Total cash disbursements Preliminary cash balance Ending cash balance Loan balance May June April Loan balance Beginning of month Additional loan (loan repayment) Loan balance End of month month separately) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2015 10. Budgeted balance sheet. ZIGBY MANUFACTURIND Budgeted Balance Sheet June 30, 2015 Assets Liabilities and Equity Liabilities Total liabilities Stockholders Equity