The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTU Balance Shee March 31 Assets Liabilities and Equity Cash $ 53,000 Liabilities Accounts receivable 350,980 Accounts payable $ 204,800 Raw materials Inventory 96,600 Loan payable 25,000 Finished goods inventory 313,9201 Long-term note payable 500,000 $729,800 Equipment Less: Accumulated depreciation $ 626,000 163,000 Equity 348,000 199,700 Total assets $1,277,500 Total liabilities and equity 547,700 $1,277,500 463,000 Common stock Retained earnings To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 21,800 units. Budgeted sales in units follow: April, 21,800; May, 18,700; June, 21,000; and July, 21.800. The product's selling price is $23.00 per unit and its total product cost is $18.00 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 4,830) pounds. The budgeted June 30 ending raw materials inventory is 5,300 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 17,440 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $9 per hour. e. The predetermined variable overhead rate is $4.00 per direct labor hour. Depreciation of $30,750 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 $4,300. g. Monthly general and administrative expenses include $25,000 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).