[The following information applies to the questions displayed below.]

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015:

ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015
Assets
Cash	$	54,000
Accounts receivable		354,375
Raw materials inventory		100,495
Finished goods inventory		333,000
Total current assets		841,870
Equipment, gross		628,000
Accumulated depreciation		(164,000)
Equipment, net		464,000
Total assets	$	1,305,870
Liabilities and Equity
Accounts payable		212,195
Short-term notes payable		26,000
Total current liabilities	$	238,195
Long-term note payable		514,000
Total liabilities		752,195
Common stock		349,000
Retained earnings		204,675
Total stockholders equity		553,675
Total liabilities and equity	$	1,305,870

To prepare a master budget for April, May, and June of 2015, management gathers the following information.

a.	Sales for March total 22,500 units. Forecasted sales in units are as follows: April, 22,500; May, 19,500; June, 21,700; July, 22,500. Sales of 254,000 units are forecasted for the entire year. The products selling price is $22.50 per unit and its total product cost is $18.50 per unit.
b.	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 5,025 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,400 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials.
c.	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 18,000 units, which complies with the policy.
d.	Each finished unit requires 0.50 hours of direct labor at a rate of $10 per hour.
e.	Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $4.10 per direct labor hour. Depreciation of $30,790 per month is treated as fixed factory overhead.
f.	Sales representatives commissions are 6% of sales and are paid in the month of the sales. The sales managers monthly salary is $4,400.
g.	Monthly general and administrative expenses include $26,000 administrative salaries and 0.5% monthly interest on the long-term note payable.
h.	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 is collected in the month of the sale).
i.	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.
J.	The minimum ending cash balance for all months is $54,000. 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.
K.	Dividends of $24,000 are to be declared and paid in May.

l.	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.
m.	Equipment purchases of $144,000 are budgeted for the last day of June.

Required:

Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar:

ZIGBY MANUFACTURING
Sales Budget
April, May, and June 2015
	Budgeted Unit Sales	Budgeted Unit Price	Budgeted Total Dollars
April 2015
May 2015
June 2015
Totals for the quarter

ZIGBY MANUFACTURING Production BudgetA pril, May, and June 2015April MayJune Next month's budgeted sales (units)19,50021,70022,500Ratio of inventory to future sales80%80%80%Required units of available productionUnits to be produced

ZIGBY MANUFACTURING
Raw Materials Budget
April, May, and June 2015
	April	May	June
Production budget (units)
Materials needed for production
Total materials requirements (units)
Materials to be purchased
Material price per unit
Total cost of direct material purchases

ZIGBY MANUFACTURING Direct Labor BudgetApril, May, and June 2015 April MayJuneTotalBudgeted production (units)Total labor hours neededLabor dollars ZIGBY MANUFACTURINGFactory Overhead BudgetApril, May, and June 2015AprilMayJuneTotalLabor hours neededBudgeted variable overheadBudgeted fixed overheadBudgeted total overhead

ZIGBY MANUFACTURING
Selling Expense Budget
April, May, and June 2015
	April	May	June
Budgeted sales
Sales commissions

ZIGBY MANUFACTURING General and Administrative Expense BudgetsApril, May, and June 2015AprilMayJuneTotal expenses

Calculation of Cash receipts from customers:
		April	May	June
Total budgeted sales
Cash sales	30%
Sales on credit	70%
Total cash receipts from customers
		April	May	June
Current month's cash sales
Collections of receivables

ZIGBY MANUFACTURINGCash BudgetApril, May, and June 2015AprilMayJuneBeginning cash balanceTotal cash availableCash disbursements:Total cash disbursementsPreliminary cash balanceEnding cash balanceLoan balanceAprilMayJuneLoan balance - Beginning of monthAdditional loan (loan repayment)Loan balance - End of month