The management of Zigby Manufacturing prepared the following balance sheet for March 31.

ZIGBY MANUFACTURINGBalance SheetMarch 31Assets Liabilities and Equity Cash $ 112,000Liabilities Accounts receivable 964,320Accounts payable$ 562,800 Raw materials inventory 275,800Loan payable12,000 Finished goods inventory 911,512Long-term note payable1,400,000$ 1,974,800 Equipment$ 1,680,000 Equity Less: Accumulated depreciation420,0001,260,000Common stock938,000 Retained earnings610,8321,548,832 Total assets $ 3,523,632Total liabilities and equity $ 3,523,632

To prepare a master budget for April, May, and June, management gathers the

To prepare a master budget for April, May, and June, management gathers the following information.

1. Sales for March total 57,400 units. Budgeted sales in units follow: April, 57,400; May, 54,600; June, 56,000; and July, 57,400. The products selling price is $24.00 per unit and its total product cost is $19.85 per unit.
2. Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given months ending materials inventory to equal 50% of the next months direct materials requirements. The March 31 raw materials inventory is 13,790 pounds. The budgeted June 30 ending raw materials inventory is 11,200 pounds. Each finished unit requires 0.50 pound of direct materials.
3. Company policy calls for a given months ending finished goods inventory to equal 80% of the next months budgeted unit sales. The March 31 finished goods inventory is 45,920 units.
4. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour.
5. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $56,000 per month is the only fixed factory overhead item.
6. Sales commissions of 8% of sales are paid in the month of the sales. The sales managers monthly salary is $8,400.
7. Monthly general and administrative expenses include $33,600 for administrative salaries and 0.9% monthly interest on the long-term note payable.
8. 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).
9. 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).
10. The minimum ending cash balance for all months is $112,000. 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.
11. Dividends of $28,000 are budgeted to be declared and paid in May.
12. 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.
13. Equipment purchases of $280,000 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 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.

REQ 1 sales budget:

aprilmayjunebudgeted sales unit selling price per unit total budgeted sales

REQ2 Production budget.

aprilmayjune budgeted sales unit add desired ending inventory next period budgeted sales ratio of inventory to future sales desired ending inventory total required units less beginning inventory units units produce

REQ 3 Direct materials budget.

APRILMAYJUNE UNITS TO PRODUCE MATERIALS REQUIRED MATERIALS NEEDED ADD DESIRED ENDING INVENTORY TOTAL MATERIAL POUNDS LESS BEGINNING MATERIALS MATERIALS TO PURCHASE MATERIALS COST PER POUND COST OF DIRECT MATERIALS PURCHASES

REQ 4 Direct labor budget.

aprilmayjune units to produce direct laborhours needed costs of direct labor

req 5 Factory overhead budget.

aprilmayjune direct labor hours needed variable overhead rate budgeted variable overhead budgeted fixed overhead budgeted total factory overhead

REQ6 Selling expense budget.

Aprilmayjun budgeted sales sales commission percent sales commissions sales salaries total selling expenses

req 7 General and administrative expense budget.

aprilmayjune admin salaries interest long term note total general and admin expenses

req8 Schedule of cash receipts.

aprilmayjunsales cash receipts cash sales collections of prior sales total cash receipts

req9 Schedule of cash payments for direct materials..

aprilmayjunmaterials purchases cash payments for current period purchases prior period purchases total cash payments

req 10 Cash budget.

aprilmay junbeginningscash balance ending cash balance

loan balance

aprilmayjunloan balance begining additional loans loan balance

Budgeted income statement for entire second quarter (not monthly).

sales cost of goods sold total operation expenses

Budgeted balance sheet at June 30.

assets liabilities and equity

The management of Zigby Manufacturing prepared the following balance sheet for March 31