Problem 20-4A (Algo) Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following balance sheet for March 31, Assets Cash Accounts receivable Raw materials inventory Finished poods inventory Equipment Less: Accumulated depreciation ZIGGY MANUFACTURING Balance Sheet March 31 Liabilities and Equity $ 104,000 abilities 895,440 Accounts payable 256,100 Loan payable 846,484 Long-term note payable Equity 1,170,000 Common stock Petar warnings $3,271.944 Total Liabilities and equity $ 522,600 12.000 $300,000 $ 1,84.600 $1,560,000 390,00 871,000 5662344 Total assets 1,432,140 $1,271,944 To prepare a master budget for April May, and June, management grathers the following information o. Sales for March total 53.300 units. Budgeted sales in units follow. April, 53300, May 50 700; June 52.000, and July, 53 300 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 12.805 pounds. The budgeted June 30 ending raw materials inventory is 10.400 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 42540 units d. Each finished unit requires 0.50 hour of direct laborata rate of $15 per hour e. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $52.000 per month is the only fixed factory overhead item f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $7800 Help Save & Exit Submit factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $7800, g. Monthly general and administrative expenses include $31200 for administrative salaries and 0.9% 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) i. 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 $104.000. 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 $26,000 are budgeted to be declared and paid in May. 1. No cash payments for income taxes are budgeted in the second calendar quartet Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter. m. Equipment purchases of $260.000 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 12. Budgeted balance sheet at June 30. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Req 4 Reg 5 Req6 Reg 7 Reg 8 to 10 Req 11 Rey 12 Sales budget ZIGBY MANUFACTURING Sales Budgets April May June Budgeted sales units Selling price per unit Total budgeted sales Reg 2 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Req6 Req7 Reg 8 to 10 Req 11 Reg 12 Production budget June Total ZIGBY MANUFACTURING Production Budget April May Budgeted sales units Calculation of desired ending inventory Next period budgeted sales units 50.700 52 000 Ratio of inventory to future sales 80% 80% 53 300 80% Total required units Units to produce IH Req1 Reg 2 Req3 Red Reg 5 Reg G Reg7 Req 8 to 10 Req 11 Reg 12 Raw materials budget. (Round per unit values to 2 decimal places.) apea ZIGBY MANUFACTURING Direct Materials Budget April May June SOK Units to produce ant ences Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg Reg to 10 Reg 11 Hey 12 Direct labor budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Labor Budget April May June Total Units to produce Direct labor hours needed Cost of direct la Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reas 5 Reg 6 Reg 7 Req 8 to 10 Req 11 Reg 12 Factory overhead budget. (Round variable overhead rate values to 2 decimal places.) ZIGBY MANUFACTURING ok Factory Overhead Budget April May June Total Direct labor hours needed Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 to 10 Reg 11 Reg 12 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budget April May June Budgeted sales Sales commissions JE SU Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Rbq 7 Req 8 to 10 Req 11 Req 12 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April May June Total general and administrative expenses Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Req 8 to 10 Reg 11 Req 12 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials 10. Cash budget (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign) Show less ZIBGY MANUFACTURING Schedule of Cash Receipts April May June $ 1279,200 $1,216,800 $ 1,248,000 os Sales Cash receipts from Cash sales Collections of prior penod sales Total cash recept ference Schedule of Cash Payments for Direct Materials 5 514,800 $ 523.900 S 473 200 Matens purchases Casis payments for Current Denod purchases Prior period purchases Totalcoh payments Cash Budget Total cash payments 1 Cash Budget Anrit May June Beginning osh balance 10 outs Spod Total cash avatable Loss Cash payments for D Tot cash payments Pracashwane Endingsbate Loan balance Total cash payments Preliminary cash balance ped Ending cash balance ok nt Loan balance ences April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ Save Subm. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Rego Reg 7 Req 8 to 10 Reg 11 Reg 12 1 Budgeted income statement for entire second quarter (not monthly). (Round your final answers to the nearest whole dollar) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 10 points Skipped 000 Selling general and administrative expenses Part rences Total operating (Hoto 10 Reg 125 Req1 Reg 2 Reg 3 Reg4 Reg 5 Reg 6 Reg 7 Reg 8 to 10 Req 11 Reali2 Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets Total current assets Equipment, vt Total assets Llabilities and Equity Lates 0 Bank loan payable Total current