Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
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. 0. Sales for March total 20,800 units. Budgeted sales in units follow: April, 20,800; May, 21,600: June, 20,900; and July, 20.800. The product's selling price is $26.00 per unit and its total product cost is $21.00 per unit. b. Raw materials imventory 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 5,360 pounds. The budgeted June 30 ending raw materials inventory is 4,200 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 finlshed goods inventory is 16,640 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $17 per hour. e. The predetermined varlable overhead rate is $3.00 per direct labor hour. Depreciation of $21,100 per month is the only fixed factory overhead item. f. Sales commlssions of 8% of sales are pald in the month of the sales. The sales manager's monthly salary is $3,200. 9. Monthly general and administrative expenses include $14,000 for administrative salaries and 0.7% monthly interest on the long. 9. Monthly general and administrative expenses include $14,000 for administrative salaries and 0.7% 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 $12,000. 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 $12,000 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. m. Equipment purchases of $100,000 are budgeted for the last day of June. Required: 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 recelpts. 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. Sales budget

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Dare To Be Different An Auditors Personal Guide To Excellence

Authors: Daniel Clark

1st Edition

1490772405, 978-1490772400

More Books

Students also viewed these Accounting questions