Return to question

The management of Zigby Manufacturing prepared the following balance sheet for March $31.$

To prepare a master budget for April, May, and June, management gathers the following information.

a$.$ Sales for March total $49,200$ units. Budgeted sales in units follow. April, $49,200$; May, $46,800$; June, $48,000$; and July, $49,200.$ The product's selling price is $$24\mathrm{.}00$ per unit and its total product cost is $$19\mathrm{.}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 $11,820$ pounds. The budgeted June $30$ ending raw materials inventory is $9,600$ pounds. Each finished unit requires $0\mathrm{.}50$ 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 $39,360$ units.

d$.$ Each finished unit requires $0\mathrm{.}50$ hour of direct labor at a rate of $$15$ per hour.