The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Balance Sheet March 31 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory. Equipment Less: Accumulated depreciation Total assets $ 614,000 157,000 $ 69,000 Liabilities 390,600 86,000 348,480 457,000 Liabilities and Equity Accounts payable Loan payable Long-term note payable. Equity Common stock Retained earnings $1,351,080 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. $ 178,700 19,000 500,000 342,000 311,380 $ 697,700 653,380 $1,351,080 a. Sales for March total 18,000 units. Budgeted sales in units follow: April, 18,000; May, 17,000; June, 20,700; and July, 18,000. The product's selling price is $31.00 per unit and its total product cost is $24.20 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 4,300 pounds. The budgeted June 30 ending raw materials inventory is 4,700 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 14,400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $22 per hour. e. The predetermined variable overhead rate is $3.40 per direct labor hour. Depreciation of $27,850 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 $3,700. 9. Monthly general and administrative expenses include $19,000 for administrative salaries and 0.6% monthly interest on the long- term note payable. s g. Monthly general and administrative expenses include $19,000 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). J. The minimum ending cash balance for all months is $69,000. 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 $17,000 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 morithly). 12. Budgeted balance sheet at June 30. 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. Complete this question by entering your answers in the tabs below. Req 1 Sales budget. Req 2 Budgeted sales units Selling price per unit. Total budgeted sales Req 3 Req 4 ZIGBY MANUFACTURING Sales Budgets April May Heg1 Req 5 June Reg 6 Req 7 Reg 2 > Req 8 to 10 Req 11 Req 12 Budgeted sales units Calculation of desired ending inventory Next period budgeted sales units Ratio of inventory to future sales Total required units Units to produce ZIGBY MANUFACTURING Production Budget April 17,000 80% < Req 1 May 20,700 80% June 18,000 80% Req 3 > Total Raw materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Materials Budget April 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 May June Direct labor budget. (Round per unit values to 2 decimal places.) Units to produce Direct labor hours needed. Cost of direct labor ZIGBY MANUFACTURING Direct Labor Budget April < Req 3 May June Req 5 > Total Direct labor hours needed Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead ZIGBY MANUFACTURING Factory Overhead Budget April Total Selling expense budget. Budgeted sales Sales commissions ZIGBY MANUFACTURING Selling Expense Budget April May < Req 5 June Req 7 > General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April Total general and administrative expenses < Req6 May June Req 8 to 10 > 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sig Sales Cash receipts from Cash sales. Collections of prior period sales Total cash receipts Materials purchases Cash payments for Current period purchases Prior period purchases Total cash payments Raninning rach halance ZIBGY MANUFACTURING Schedule of Cash Receipts April $ Schedule of Cash Payments for Direct Materials April $ 558,000 $ Cash Budget 185,800 $ April May < Prev 527,000 $ May 1 of 1 June 192,500 $ 186,700 641,700 June Next > Beginning cash balance Total cash available Less: Cash payments for: Total cash payments Preliminary cash balance Ending cash balance Cash Budget April SAL Loan balance. May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month Loan balance $ April < Req 7 May June Req 11 > Budgeted income statement for entire second quarter (not monthly). (Round your final answ ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 Selling, general and administrative expenses Total operating expenses Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) Assets Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 0 Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Bank loan payable Total current liabilities Equity Total Equity Total Liabilities and Equity 0 The management of Zigby Manufacturing prepared the following balance sheet for March 31. ZIGBY MANUFACTURING Balance Sheet March 31 Assets Cash Accounts receivable. Raw materials inventory Finished goods inventory Equipment Less: Accumulated depreciation Common stock Total assets Retained earnings $1,351,080 Total liabilities and equity To prepare a master budget for April, May, and June, management gathers the following information. $ 614,000 157,000 $ 69,000 Liabilities 390,600 86,000 348,480 Liabilities and Equity 457,000 h Accounts payable Loan payable Long-term note payable Equity $ 178,700 19,000 500,000 342,000 311,380 $ 697,700 653,380 $1,351,080 a. Sales for March total 18,000 units. Budgeted sales in units follow: April, 18,000; May, 17,000; June, 20,700; and July, 18,000. The product's selling price is $31.00 per unit and its total product cost is $24.20 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 4,300 pounds. The budgeted June 30 ending raw materials inventory is 4,700 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 14,400 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $22 per hour. e. The predetermined variable overhead rate is $3.40 per direct labor hour. Depreciation of $27,850 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 $3,700. g. Monthly general and administrative expenses include $19,000 for administrative salaries and 0.6% monthly interest on the long- term note payable. The company hurmate 20% of cales to be for each and the remaining 70% on credit Crorit color are collected in full in the month tes 9. Monthly general and administrative expenses include $19,000 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). J. The minimum ending cash balance for all months is $69,000. 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 $17,000 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.