The management of Zigby Manufacturing prepared the following balance sheet for March 31. Cash Assets ZIGBY MANUFACTURING Balance Sheet March 31 Liabilities Liabilities and Equity $ 42,000 Accounts receivable 378,560 Accounts payable Raw materials inventory 107,200 Loan payable Finished goods inventory 349,440 Long-term note payable $ 211,300 14,000 500,000 $ 725,300 Equipment Less: Accumulated depreciation $ 604,000 152,000 Equity 452,000 Common stock Retained earnings 337,000 266,900 603,900 Total assets $ 1,329,200 Total liabilities and equity $ 1,329,200 To prepare a master budget for April, May, and June, management gathers the following information. a. 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 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 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 finished 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 variable overhead rate is $3.00 per direct labor hour. Depreciation of $21,100 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,200. a. 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 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 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 finished 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 variable overhead rate is $3.00 per direct labor hour. Depreciation of $21,100 per month is the only fixed factory overhead item. f. Sales commissions of 8% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,200. g. 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 $42,000. 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. I. 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 April, 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. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Show less Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Production budget. Budgeted sales units ZIGBY MANUFACTURING Production Budget April May June Total Next period budgeted sales units 21,600 20,900 20,800 Ratio of inventory to future sales 80% 80% 80% Desired ending inventory units 17,280 16,720 16,640 Total required units 38,080 38,320 37,540 Less: Beginning inventory units 16,640 17,280 16,720 Units to produce 21,440 21,040 20,820 63,300 < Req 1 Req 3 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April May June Total Administrative salaries $ 14,000 $ 14,000 $ 14,000 $ 42,000 Interest on long-term note Total general and administrative expenses $ 14,000 $ 14,000 $ 14,000 $ 42,000 < Req 6 Req 8 to 10 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Selling expense budget. Budgeted sales Sales commission percent Sales commissions Sales salaries Total selling expenses ZIGBY MANUFACTURING Selling Expense Budget April May June 8% 3,200 < Req 5 Req 7 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Sales Cash receipts from Cash sales Collections of prior period sales Total cash receipts ZIBGY MANUFACTURING Schedule of Cash Receipts April May June $ 540,800 $ 561,600 $ 543,400 $ 0 $ 0 $ 0 Schedule of Cash Payments for Direct Materials Materials purchases Cash payments for Current period purchases April May June $ 212,400 $ 209,300 $ 188,100 Show less Schedule of Cash Payments for Direct Materials Materials purchases Cash payments for Current period purchases Prior period purchases Total cash payments Beginning cash balance Add: Cash receipts from sales Total cash available April May June $ 212,400 $ 209,300 $ 188,100 $ 0 $ 0 $ 0 Cash Budget April May June Less: Cash payments for: Direct material Direct labor Variable overhead General and administrative salaries 14,000 14,000 14,000 Maintenance expense Dividends Purchases of equipment 0 12,000 0 100,000 Purchase of land Variable overhead General and administrative salaries 14,000 14,000 14,000 Maintenance expense Dividends Purchases of equipment Purchase of land Total cash payments Preliminary cash balance Additional loan (loan repayment) Ending cash balance Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month 0 12,000 0 100,000 14,000 26,000 114,000 0 0 Loan balance April May June $ 14,000 $ (14,000) < Req 7 0 Req 11 > 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 < Req 8 to 10 0 0 $ 0 Req 12 > Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets Total assets Liabilities Liabilities and Equity 0 Total assets Liabilities Equity Liabilities and Equity 0 Total Liabilities and Equity < Req 11 Req 12 >