The management of Zigby Manufacturing prepared the following balance sheet for March 31 . To prepare a master budget for April, May, and June, management gathers the following information, a. Soles for Morch total 22,300 units. Budgeted sales in units follow; April, 22,300; May, 16,300; June, 22,700; and July, 22,300. The product's selling price is $27.00 per unit and its total product cost is $21.00 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 4,375 pounds. The budgeted June 30 ending raw materials inventory is 5.200 pounds. Each finished unit requires 0.50 pound of direct materials. c. Company policy calls for a glven month's ending finished goods inventory to equal 80% of the next month's budgeted unit sales The Morch 31 finished goods inventory is 17,840 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $15 per hour. e. The predetermined variable overhead rate is $3,90 per direct labor hour. Depreciation of $31,672 per month is the only fixed factory overhend item, 1. Soles commlssions of 10% of saies ore paid in the month of the sales. The sales manager's monthly salary is $4.200. 9. Monthiy general and administrative expenses include $24,000 for administrative salaries and 0.95 monthly interest on the fong: term note peyoble, h. The company budgets 30% of sales to be for cash and the remaining 70\% on credit. Credit soles are collected in full in the month following the sale (no credit soles are collected in the month of sale). 1. All row moterials purcheses are on ciedit, and accounts payable are solely tied to raw matenais purchases. Raw materiais purchases are fully poid in the next month (none are paid in the month of purchase). 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). j. The minimum ending cash balance for all months is $65,000. 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 cosh balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $22,000 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 poid 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 Aprili, May, and June: 1. Sales budget. 2. Production budget. 3. Direct materlals budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Seling 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. Sales budget: Production budget. Direct materials budget. (Round per unit values to 2 decimal places.) Direct labor budgot, (Round per unit values to 2 decimal places.) Factory overhead budget. (Round variable overhesd rate values to 2 decimal places.) Selling expense budget: Complete this question by entering your answers in the tabs below. General and administrative expense budget. 8. Schedule of cash recelpts. 9. Schedule of cash payments for direct materiais. 10. Cash budget. (Negative balances and Loan repayment ampunts (if any) should be indicated with minus sign.) points rest whole dollar.)
