Problem 22-4A (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 ZIGBY MANUFACTURING Balance Sheet March Assets Liabilities and Equity Cash 5 57.000 abilities Accounts receivable 406,000 Accounts payable Raw materials inventory 91,600 Loan payable Finished goods inventory 380,480 Long-ters note payable Equipment 5 534,00 Equity Less: Accumulated depreciation 167.000 467.000 Conton stock Retained earnings Total assets 33,402.00 Total liabilities and equity To prepare a master budget for April May, and June, management gathers the following information 5206,300 29,000 500.000 5735,300 352,000 314250 666.750 $1,402,680 a. Sales for March total 23.200 units. Budgeted sales in units follow. April, 23 200, May 17100, June 21900, and July 23,200 The product's selling price is $25.00 per unit and its total product cost is $2050 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 4.580 pounds. The budgeted June 30 ending raw materials inventory is 5700 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 18,560 units d. Each finished unit requires 0 50 hour of direct laborata rate of $13 per hour e. The predetermined variable overhead rate s 54 40 per direct labor hour. Depreciation of $37,320 per month is the only fixed factory overhead item Sales commissions of 5% of sales are paid in the month of the sales The sales manager's monthly salary is $4700 g. Monthly general and administrative expenses include $29.000 for administrative salaries and 08% 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 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 $57,000. If necessary, the company borrows enough cash using a loan to reach the minimum Loans require an interest payment of 19 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 $27.000 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 quarter and budgeted to be paid in the third calendar quarter ** k. Dividends of $27000 are budgeted to be declared and paid in May L. No cash payments for income taxes are budgeted in the second calendar quarter Income tax will be assessed at 35% in the quarter 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 Apri, 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 Complete this question by entering your answers in the tabs below. Rea 1 Reg2 Reg Reas Rego Reg Registo 10 Reg 11 Reg 12 Sales budget. ZIGOY MANUFACTURING Sales Budgets April May June Budgeted sales units Soling price per unit Total budgeted sales Req2 > Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg4 Reg 5 Reg 6 Reg 7 Reg 8 to 10 Reg 11 Reg 12 Production budget June Total ZIGBY MANUFACTURING Production Budget April May Budgeted sales units Calculation of desired ending inventory Next perlod budgeted sales units 17.100 21.900 Ratio of inventory to future sales 80% 80% 23 200 80% Total required units Units to produce 12. Budgeted balance sheet at June 30 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 7 Reg 8 to 10 Reg 11 Reg 12 Raw materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Materials Budget April May June Units to produce Materials needed for production (lbs) Total materials required (lbs) Materials to purchase (bs) Materials cost per pound Cost of direct materials purchases Complete this question by entering your answers in the tabs below. Reg 1 Req2 Reg 3 Req 4 Reg 5 Reg 6 Reg Req 8 to 10 Reg 11 Reg 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 labor Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Reg 5 Reg 6 Reg 2 Req 8 to 10 Reg 11 Reg 12 Factory overhead budget. (Round variable overhead rate values to 2 decimal places.) June Total ZIGBY MANUFACTURING Factory Overhead Budget April May Direct labor hours needed Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fored overhead Budgeted total factory overhead 11. Budgeted income statement for entire second quarter (not monthly) 12. Budgeted balance sheet at June 30. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg 2 Reg 8 to 10 Reg 11 Reg 12 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budget April May June Budgeted sales Sales commissions 12. Budgeted balance sheet at June 30 Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Req6 Reg 7 Reg 8 to 10 Reg 11 Reg 12 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April May June Total gen and admin expenses Schedule of cash receipts, Schedule of cash payments for direct materials, Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) ZIBGY MANUFACTURING Schedule of Cash Receipts from Sales April May Sales $ 580,000 $ 427,500 $ Cash receipts from Cash sales Collections of prior period sales Total cash receipts June 547.500 Schedule of Cash Payments for Direct Materials 196,300 s 219,400 $ 228,700 Materials purchases Cash payments for Current period purchases Prior period purchases Total cash payments Cash Budget April May June Beginning cash balance Total cash available Less Cash payments for pin June Beginning cash balance Total cash available Less Cash payments for ces Total cash payments Preliminary cash balance Ending cash balance Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Req3 Reg 4 Req 5 Reg 6 Reg 7 Red 8 to 10 Reg 11 Reg 12 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 Selling general and administrative expenses Total operating expenses stion by entering your answers in the tabs below. Rei Reg 2 Reg 3 Reg 4 Regs Reg 6 Reg 7 Reg 8 to 10 Red 11 Reg 12 ed Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) ZIGGY MANUFACTURING Budgeted Balance Sheet June 30 Assets ces Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable 0 Total current abilities Equity Total Equity 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, net Total assets Liabilities and Equity Liabilities Bank loan payable Total current liabilities Equity Total Equity Total Liabilities and Equity