The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Balance Sheet March 31 Assets Liabilities and Equity Cash $ 43,000 Liabilities Accounts receivable 404,040 Accounts payable $194,800 Raw materials inventory 86,200 Loan payable 15,000 Finished goods inventory 387,168 Long-term note payable 500,000 $ 709,800 Equipment Less: Accumulated depreciation $ 606,000 153,000 Equity 453,000 Common stock 338,000 Retained earnings 325,608 Total assets $1,373,408 Total liabilities and equity 663,608 $1,373,408 To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 22,200 units. Budgeted sales in units follow: April, 22,200; May, 16,000; June, 19,800; and July, 22,200. The product's selling price is $26.00 per unit and its total product cost is $21.80 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 4,310 pounds. The budgeted June 30 ending raw materials inventory is 4,300 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 17,760 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $18 per hour. e. The predetermined variable overhead rate is $3.00 per direct labor hour. Depreciation of $25,133 per month is the only fixed factory overhead item. f. Sales commissions of 9% of sales are paid in the month of the sales. The sales manager's monthly salary is $3,300. g. Monthly general and administrative expenses include $15,000 for administrative salaries and 0.6% 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). i. The minimum ending cash balance for all months is $43.000. If necessarv. the company borrows enough cash using a loan to reach 10 of 10 < Prev Next > 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 $43,000. 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 $13,000 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: 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. on 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 Sales budget. ZIGBY MANUFACTURING Sales Budgets April May June Budgeted sales units Selling price per unit Total budgeted sales $ 0 $ $ 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 Next period budgeted sales units Ratio of inventory to future sales Desired ending inventory units Total required units Units to produce ZIGBY MANUFACTURING Production Budget April 16,000 80% May June Total 19,800 80% 22,200 80% Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Direct materials budget. (Round per unit values to 2 decimal places.) Units to produce Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases ZIGBY MANUFACTURING Direct Materials Budget April May June answers in the tabs below. Req 1 Req 2 Req 3 RAQ 4 Req 5 Req 6 Req 7 Req 8 to 10: Req 11 Req 12 Direct labor budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Units to produce Direct labor hours needed Cost of direct labor Direct Labor Budget April May June Total 0 mplte 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 Factory overhead budget. (Round variable overhead rate values to 2 decimal places.) Direct labor hours needed ZIGBY MANUFACTURING Factory Overhead Budget April May June Total Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead < Req 4 Req 6 >