The management of Zigby Manufacturing prepared the following balance sheet for March $31.$ZIGBY MANUFACTURINGBalance SheetMarch $31$Assets$$Liabilities and Equity$$Cash$$$ $128,000$Liabilities$$Accounts receivable$1,102,080$Accounts payable$ $643,200$Raw materials inventory$315,200$Loan payable$12,000$Finished goods inventory$1,041,728$Long$-$term note payable$1,600,000$$ $2,255,200$Equipment$ $1,920,000$Equity$$Less: Accumulated depreciation$480,0001,440,000$Common stock$1,072,000$Retained earnings$699,8081,771,808$Total assets$$$ $4,027,008$Total liabilities and equity$$$ $4,027,008$To prepare a master budget for April, May, and June, management gathers the following information.aSales for March total $65,600$ units. Budgeted sales in units follow: April, $65,600$; May, $62,400$; June, $64,000$; and July, $65,600.$ The products selling price is $$24\mathrm{.}00$ per unit and its total product cost is $$19\mathrm{.}85$ per unit.bRaw materials inventory consists solely of direct materials that cost $$20$ per pound. Company policy calls for a given months ending materials inventory to equal $50\%$ of the next months direct materials requirements. The March $31$ raw materials inventory is $15,760$ pounds. The budgeted June $30$ ending raw materials inventory is $12,800$ pounds. Each finished unit requires $0\mathrm{.}50$ pound of direct materials.cCompany policy calls for a given months ending finished goods inventory to equal $80\%$ of the next months budgeted unit sales. The March $31$ finished goods inventory is $52,480$ units.dEach finished unit requires $0\mathrm{.}50$ hour of direct labor at a rate of $$15$ per hour.eThe predetermined variable overhead rate is $$2\mathrm{.}70$ per direct labor hour. Depreciation of $$64,000$ per month is the only fixed factory overhead item.fSales commissions of $8\%$ of sales are paid in the month of the sales. The sales managers monthly salary is $$9,600.$gMonthly general and administrative expenses include $$38,400$ for administrative salaries and $0\mathrm{.}9\%$ monthly interest on the long$-$term note payable.hThe 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$).$iAll 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$).$jThe minimum ending cash balance for all months is $$128,000.$ If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of $1\%$ at each month$-$end $($before any repayment$).$ If the month$-$end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans.kDividends of $$32,000$ are budgeted to be declared and paid in May.lNo 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.mEquipment purchases of $$320,000$ are budgeted for the last day of June.$\backslash$table$[[$Schedule of Cash Payments for Direct Materials$],[,,$pril,,May,,une$],[$Materials purchases,$$,633,600,$$$,644,800,$$$,582,400],[$Cash payments for$],[$Current period purchases$],[$Prior period purchases$],[$Total cash payments,$$,0,$$$,0,$$$,0]]$

Cash Budget