The management of Zigby Manufacturing prepared the following balance sheet for March 31 GEY MANUFACTURING Balance Sheet March 31 Assets Ciabilities and Equity $140,000 Liabilities Accounts receivable 344,400 Accounts payable Raw materials inventory 98,500 Loan payable Finished goods Inventory 325.540 Long term note payable Equipment $ 600,000 Equity Less: Accumulated depreciation 150.000 450.000 Common stock Betained morning Total assets ORLD Total abilities and equity To prepare a master budget for Apr May, and June, management gothers the following information 5 201,000 12,000 500,000 $15,000 335.000 220,44 5450 30 a. Sales for March total 20.500 units Budgeted sales in units follow Apt, 20.500. May, 19.500 June 20.000, and July 20.500 The product's selling price is $24.00 per unit and its total product cost is $1985 per unit b. 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 month's direct materials requirements. The March 31 raw materials inventory is 4.925 pounds. The budgeted June 30 ending raw matenals inventory is 4.000 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 tinished goods inventory is 16 400 units d. Each finished unit tequires 0 50 hour of direct laborat a rate of 515 per hour e. The tenetermine rahi the rate is $3.700 ditert thorou Dervention nf 57000 net month is the only fivart 6. JOCS TOE WET VLOE LUJUUS. Duuye cu SW , , , , , we product's selling price is $24.00 per unit and its total product cost is $19.85 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 4,925 pounds. The budgeted June 30 ending raw materials inventory is 4.000 pounds. Each finished unit requires 050 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 16,400 units d. Each finished unit requires 0.50 hour of direct laborat a rate of $15 per hour e. The predetermined variable overhead rate is $270 per direct labor hour. Depreciation of $20,000 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 $3.000 g. Monthly general and administrative expenses include $12,000 for administrative salaries and 0,9% 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 fall in the month following the sale (no credit sales are collected in the month of sale). 1. 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), ). The minimum ending cash balance for all months is $40,000, If necessary, the company borro enough cash 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 or $10.000 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 Ch 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. Complete this question by entering your answers in the tabs below. Reg 3 Reg 5 Reg 2 Reg 4 Reg 6 Reg 7 Req-1 Reqs to 10 Red 12 Req11 Sales budget. 12. Budgeted balance sheet at June 30. Complete this question by entering your answers in the tabs below. Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Req 6 Reg 7 Reg 8 to 10 Reg 11 Reg 12 Sales budget. ZIGBY MANUFACTURING Sales Budgets April May June Budgeted sales units Selling price per unit Total budgeted sales S 05 0 $ 0 Reg 1 Req 2 Req3 Reg 4 Reg 5 Reg 6 Req 7 Reg 8 to 10 Reg 11 Reg 12 Production budget. ZIGBY MANUFACTURING Production Budget April May June Total Budgeted sales units Calculation of desired ending inventory Next period budgeted sales units Ratio of inventory to future sales 19,500 80% 20.000 80% 20.500 80% Total required units Units to produce Reg 1 Req 2 Reg 3 Req 4 Req 5 Reg 6 Reg 7 Red 8 to 10 Reg 11 Reg 12 Raw materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Materials Budget April May June 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 Req 1 Reg 2 Req3 Req 4 Req 5 Reg 6 Req 7 Req 8 to 10 Req 11 Red 12 Factory overhead budget. (Round variable overhead rate values to 2 decimal places.) May June Total ZIGBY MANUFACTURING Factory Overhead Budget April Direct labor hours needed Variable overhead rate per direct labor hour Budgeted variable overhead Budgeted fixed overhead Budgeted total factory overhead ch Reg 1 Req 2 Reg 3 Reg 4 Reg 5 Reg 6 Req 7 Req 8 to 10 Reg 11 Reg 12 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budger April May June Budgeted sales Sales commissions Check my Show less ZIBGY MANUFACTURING Schedule of Cash Receipts April Sales $ 492,000 $ Cash receipts from Cash sales Collections of prior period sales Total cash receipts $ 0 $ May 468,000 $ June 480,000 June 182.000 Schedule of Cash Payments for Direct Materials April May Materials purchases $ 198.000 $ 201.500 5 Cash payments for Current period purchases Prior period purchases Total cash payments S 05 05 0 Cash Budget Check my work Cal Budget April May Slune Beginning cash balance Total cash available Less. Cash payments for Total cash payments Proliminary cash balance 1 Labil payments 0 Preliminary cash balance Ending cash balance Loan balance April May June Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month $ 0 & Req7 Reg 11 > cheque Y youturor ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 Selling general and administrative expenses ces Total operating expenses 0 0 5 0