The management of Zigby Manufacturing prepared the following balance sheet for March 31. BIGBY MANUFACTURING Balance Sheet March 31 Liabilities and Equity Cash Accounts receivable $58,000 Liabilities 440,370 Accounts payable Raw materials inventory Finished goods inventory 91,300 Loan payable 393,304 $206,400 30,000 Long-term note payable 500,000 $736,400 Equipment Less Accumulated depreciation $636,000 168,000 Equity 468,000 Common stock 353,000 Retained earnings 361,574 Total assets $1,450,974 Total liabilities and equity 714,574 1,459,924 To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 23.300 units. Budgeted sales in units follow: April, 23,300; May, 17,000: June, 21.900; and July, 23.300. The product's selling price is $27.00 per unit and its total product cost is $21.10 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 4,565 pounds. The budgeted June 30 ending raw materials inventory is 5,800 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 18,640 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $14 per hour. e. The predetermined variable overhead rate is $4.50 per direct labor hour. Depreciation of $38,357 per month is the only fixed factory overhead item. f. Sales commissions of 10% of sales are paid in the month of the sales. The sales manager's monthly salary is $4,800. g. Monthly general and administrative expenses include $30,000 for administrative salaries and 0.8% 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). L. All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials < Prev 10 of 10 Next >