The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2013 ZIGBY MANUFACTURING Estimated Balance Sheet March 31 2013 Liabilities and Equity Accounts payable $200,500 Short-term notes payable ....12000 Assets Cash 342.248 Accounts receivable Finished goods inventory Equipment, gross... Long-term note payable ..500,000 Total liablitles 712,500 Common stock 335,000 806,288 600,000 Accumulated depreclation (150,000) Retained earnings Equlpmensnet459000 Total lablides and equity ....$1256289 3 To prepare a master budget for April, May, and June of 2013, management gathers the following information: 1 a. Sales for March total 20,500 units. Forecasted sales in units are as follows: April, 20,500; May, 19,.500 June, 20,000; July, 20,500.Sales of 240,000 units are forecasted for the entire year. The produet's sell- ing price is $23.85 per unit and its total product cost is $19.85 per unit. 3 b. Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's materials requirements. The March 31 raw materials inventory is 4,925 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials 2 c. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's expected unit sales. The March 31 finished goods invetory is 16,400 units, which complies with the policy d. Each finished unit requires 0.50 hours of direct labor at a rate of S15 per hour e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead. f. Sales representatives, commissions are 8% of sales and are paid in the month of the sales. The sales g. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% h-The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are o manager's monthly salary is $3,000 per month monthly interest on the long-term note payable. collected in full in the month following the sale (none is collected in the month of the sale). Il raw materials purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases are fully paid in the next month. i. The minimum ending cash balance for all months is $40,000. If necessary, the company borrows notes require an interest enough cash using a short-term note to reach the minimum. Short-term payment of 1% at each month-end (before any repayment). If the ending cash balance eceeds the minimum, the excess will be applied to repaying the short-term notes payable balance. . Dividends of $10,000 are to be declared and paid in May I. No cash payments for income taxes are to be made during the second calendar quarter, Income tax bc assessed at 35% in the quarter and paid in the third calendar quartet will m. Equipment purchases of $130,000 are budgeted for the last day of June. he d epresiation