The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015:

ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015
Assets
Cash	$	51,000
Accounts receivable		483,600
Raw materials inventory		94,100
Finished goods inventory		443,520
Total current assets		1,072,220
Equipment, gross		622,000
Accumulated depreciation		(161,000)
Equipment, net		461,000
Total assets	$	1,533,220
Liabilities and Equity
Accounts payable		211,400
Short-term notes payable		23,000
Total current liabilities	$	234,400
Long-term note payable		515,000
Total liabilities		749,400
Common stock		346,000
Retained earnings		437,820
Total stockholders equity		783,820
Total liabilities and equity	$	1,533,220

To prepare a master budget for April, May, and June of 2015, management gathers the following information.

a.	Sales for March total 24,000 units. Forecasted sales in units are as follows: April, 24,000; May, 16,600; June, 22,200; July, 24,000. Sales of 251,000 units are forecasted for the entire year. The products selling price is $31.00 per unit and its total product cost is $26.40 per unit.
b.	Company policy calls for a given months ending raw materials inventory to equal 50% of the next months materials requirements. The March 31 raw materials inventory is 4,705 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,100 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials.
c.	Company policy calls for a given months ending finished goods inventory to equal 70% of the next months expected unit sales. The March 31 finished goods inventory is 16,800 units, which complies with the policy.
d.	Each finished unit requires 0.50 hours of direct labor at a rate of $26 per hour.
e.	Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.80 per direct labor hour. Depreciation of $31,400 per month is treated as fixed factory overhead.
f.	Sales representatives commissions are 5% of sales and are paid in the month of the sales. The sales managers monthly salary is $4,100.
g.	Monthly general and administrative expenses include $25,000 administrative salaries and 0.8% monthly interest on the long-term note payable.
h.	The company expects 35% of sales to be for cash and the remaining 65% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of the sale).
i.	All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month.
J.	The minimum ending cash balance for all months is $99,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.
K.	Dividends of $21,000 are to be declared and paid in May.

l.

No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter.

m.

Equipment purchases of $141,000 are budgeted for the last day of June.

Required:

Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar:

Sales Budget

Production Budget

Raw Materials Budget

Direct Labor Budget

Factory Overhead Budget

Selling Expense Budget

General and Administrative Expense Budget

Cash Budget & Calculations of Cash Receipts from Customers

Budgeted Income Statement

Budgeted Balance Sheet

Sales Budget

	Budgeted Unit Sales	Budgeted Unit Price	Budgeted Total Dollars
April 2015	24,000	$31.00	744,000
May 2015	16,600	31.00	514,600
June 2015	22,200	31.00	688,200
Totals for the quarter	62,800		1,946,800

Production Budget

	April	May	June	Total
Next month's budgeted sales (units)	16,600	22,200	24,000
Ratio of inventory to future sales	70%	70%	70%
Budgeted ending inventory (units)	11,620	15,540	16,800
Budgeted units sales for month	24,000	16,600	22,200
Required units of available production	35,620	32,140	39,000
Beginning inventory (units)	16,800	11,620	15,540
Units to be produced	18,820	20,520	23,460

Raw Materials Budget

	April	May	June	Total
Production Budget (units)	18,820	20,520	23,460
Materials requirements per unit	.50	.50	.50
Materials needed for production	9,410	10,260	11,730
Budgeted ending inventory	5,130	5,865	5,100
Total materials requirements (units)	14,540	16,125	16,830
Beginning inventory	4,705	5,130	5,865
Materials to be purchased	9,835	10,995	10,965	31,795
Materials price per unit	$20	$20	$20	$20
Total cost of direct material purchases	$196,700	$219,900	$219,300	$635,900

Direct Labor Budget

	April	May	June	Total
Budgeted production (units)	18,820	20,520	23,46
Labor requirements per unit (hours)	.50	.50	.50
Total labor hours needed	9,410	10,260	11,730	31,400
Labor rate (per hour)	$26	$26	$26	$26
Labor dollars	$244,660	$266,760	$304,980	$816,400