• Sales for March total 20,800 units. Forecasted sales in units are as follows: April, 20,800; May, 21,600; June, 20,900; and July, 20,800. Sales of 242,000 units are forecasted for the entire year. The products selling price is $25.00 per unit and its total product cost is $21.00 per unit.
• Company policy calls for a given months ending raw materials inventory to equal 50% of the next months materials requirements. The March 31 raw materials inventory is 5,360 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,200 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials.
• Company policy calls for a given months ending finished goods inventory to equal 80% of the next months expected unit sales. The March 31 finished goods inventory is 16,640 units, which complies with the policy.
• Each finished unit requires 0.50 hours of direct labor at a rate of $17 per hour.
• Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.00 per direct labor hour. Depreciation of $21,100 per month is treated as fixed factory overhead.
• Sales representatives commissions are 8% of sales and are paid in the month of the sales. The sales managers monthly salary is $3,200.
• Monthly general and administrative expenses include $14,000 administrative salaries and 0.7% monthly interest on the long-term note payable.
• The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale).
• All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month.
• The minimum ending cash balance for all months is $42,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.
• Dividends of $12,000 are to be declared and paid in May.
• No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter.
• Equipment purchases of $132,000 are budgeted for the last day of June

8) Using the revised budgets, complete the revised cash budget. Remember, Zigby Manufacturing will need to maintain the indicated minimum cash balance (given on connect) at the end of each month. Outstanding short-term notes require an interest payment of 1% at each month-end (before any repayment). Repayments of short-term notes payable balance will be made only to the extend the ending cash balance exceeds the minimum required. This table is completed similarly to the budget table in connect. ZIGBY MANUFACTURING Revised Cash Budget April May June Beginning cash balance Cash receipts from customers Total cash available Cash payments for: Raw materials Direct labor Variable overhead Sales commissions Sales salaries General & administrative salaries Dividends Loan interest Long-term note interest Purchases of equipment Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance May June Revised Loan balance: ST note payable April Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month June 522,500.00 ZIGBY MANUFACTURING Revised Cash Receipts from Customers April May Current month's cash sales (from connect) 528,000.00 540,000.00 Current month's credit sales collected 156,000.00 162,00.00 (20% of current months credit sales) Previous month's credit sales collected 72,800.00 75,600.00 (80% of previous months sales) Special order collected in June 291,200.00 Total cash receipts 748,800.00 1,068.800 156.750.00 73,150.00 302.400.00 1,054,800.00 Labor hours needed Variable factory overhead rate Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead ZIGBY MANUFACTURING Revised Factory Overhead Budget April May 14,720 17,320 13,000 13,000 1,720 4,320 $3 $3 5,160 12,960 June 10,410 13,000 2,590 Total 42,450 39,000 3,450 $3 18,120 Budgeted production (units) Labor requirements per unit (hours) Total labor hours needed Direct labor rate (per hour) Base direct labor cost Wage premium (3xhours over 13,000) Total Budgeted direct labor costs ZIGBY MANUFACTURING Revised Direct Labor Budget April May 29,440 36,640 .50 .50 14,720 17,320 $17 $17 250,240 294,440 5,160 12,960 255,400 307,400 June 20,820 .50 10,410 $17 176,970 Total 84.900 0.50 42,450 $171 721,650 18,120 739,770 176,970 ZIGBY MANUFACTURING Revised Raw Materials Budget April May June Total Production budget (units) 21,440 21,040 20,820 Materials requirements per unit 0.50 0.50 0.50 (unchanged from connect) Materials needed for production 10,720 10,520 10,410 Budgeted ending inventory 3,156 3,123 4,200 Total materials requirements (units) 13,876 13,643 14,610 Beginning inventory 5,360 3,156 3,123 Materials to be purchased 8,516 10,487 11,487 30,490 Material price per unit $20.00 $20.00 $20.00 $20.00 Raw Material purchases before $170,320.00 $209,740.00 $229,740.00 $609,800.00 Discount Discount (5% of purchases exceeding $487 $1,487.00 $1,974.00 10,000 lbs) Budgeted raw material purchases $170,320.00 $209,253.00 $228,253.00 $607,826.00 June Total ZIGBY MANUFACTURING Change to smooth Production Budget April, May, and June 2019 April May Budgeted ending inventory (calculate for 25,280 16,720 April, row 3 of connect for May and June) Budgeted units sales for month 20,800 43,200 Required units of available production 46,080 59,920 Beginning inventory (units) 16,640 25,280 Units to be produced during the month 29,440 34,640 16,640 20,900 37,540 16,720 20,820 84,900 ZIGBY MANUFACTURING Sales Budget April, May, and June 2019 Original Budgeted Net Sales for Special Sales Dollars Order 520,000 540,000 523,800 522,500 1,582,500 April 2019 May 2019 June 2019 Totals for the 2nd quarter Revised Net Sales 520,000 1,063,800 522,500 2,106,300 ZIGBY MANUFACTURING Special Order Number of Units (equals May's units from connect) Sales Price per unit (from connect) Gross Sales Revenue (multiply) Less Discount 3% of Gross Sales Revenue) Net Sales for Special Order 21,600 $25 $540,000 $16,200 $523,800 A ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment Accumulated depreciation Equipment, net Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term note payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity 42,000 364,000 107,200 349,440 862,640 604,000 (152,000) 452,000 $1,314,640 $ 211,300 14,000 225,300 510,000 735,300 337,000 242,340 579,340 $1,314,640