The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment, gross Accumulated depreciation Equipment, net Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term note payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $ 65,000 434,850 87, 505 374,640 961,995 624,000 (162,000) 462,000 $1,423,995 $ 199, 405 24,000 223,405 520,000 743, 405 347,000 333,590 680,590 $1,423,995 To prepare a master budget for April, May, and June of 2017, management gathers the following information: a. Sales for March total 22,300 units. Forecasted sales in units are as follows: April, 22,300; May, 16,300; June, 22,700; and July, 22,300. Sales of 252,000 units are forecasted for the entire year. The product's selling price is $26.00 per unit and its total product cost is $21.00 per unit 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 4,375 units, which complies with the policy. The expected June 30 ending raw materials Inventory is 5,200 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. 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 inventory is 17,840 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.90 per direct labor hour. Depreciation of $31670 per month is treated as fixed factory overhead. 1. Sales representatives' commissions are 10% of sales and are paid in the month of the sales. The sales manager's monthly salary is $4,200. 9. Monthly general and administrative expenses include $24,000 administrative salaries and 0.9% monthly interest on the long-term note payable. h. The company expects 25% of sales to be for cash and the remaining 75% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). 1. All raw materials purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases k. Dividends of $22.000 are to be declared and paid in May. 1. No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at quarter and paid in the third calendar quarter. m. Equipment purchases of $142,000 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 shou prepared for the second calendar quarter, except as otherwise noted below. (Round calculations up to the nearest whole except for the amount of cash sales, which should be rounded down to the nearest whole dollar.): 1. Sales budget 2. Production budget 3. Raw materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Cash budget. 9. Budgeted income statement for the entire second quarter (not for each month separately). 10. Budgeted balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budget April, May, and June 2017 April May June Budgeted sales Sales commissions 9. Budgeted 10. Budgeted balance sheet. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Required 9 Required 10 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budgets April, May, and June 2017 April May June Total budgeted G&A expenses Complete this question by entering your answers in the tabs below. 4 1 Required Requir... Requir... Requir... Requir... Requir... Requir... Requir... Requir... Requir... 2 3 5 6 7 8 9 10 Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Calculation of Cash receipts from customers: April May June Total budgeted sales Cash sales 25% Sales on credit 75% June Total cash receipts from customers April May Current month's cash sales Collections of receivables ZIGBY MANUFACTURING Cash Budget April, May, and June 2017 April Beginning cash balance May June Total cash available Cash payments for: 0 0 Total cash payments Preliminary cash balance Ending cash balance May June Loan balance April Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month Required 9 RE Required 1 Required 2 Required 3 Required 4 Required 5 Required 6 Required 7 Required 8 Budgeted income statement for the entire second quarter (not for each month separately). (Round your final answ nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2017 Operating expenses Total operating expenses 0 0 0 Budgeted balance sheet. (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30, 2017 Assets 0 Total current assets $ Equipment, net Total assets Liabilities and Equity Liabilities Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity Required 2 Required 3 Required 4 Required 5 Required 6 Require Required 1 Required 7 Production budget. ZIGBY MANUFACTURING June Total +22,300 80% Production Budget April, May, and June 2017 April May Next month's budgeted sales (units) 16,300 22,700 Ratio of inventory to future sales 80% 80% Budgeted units sales for month 22,300 18,160 Budgeted ending inventory (units) 13,040 18,160 Required units of available production 35,340 36,320 Beginning inventory (units) 17,840 13,040 Units to be produced 17,500 21,240 17,840 17,840 35,680 18,160 22,380 61,120 Complete this question by entering your answers in the tabs below. Required 3 Required 4 Required 5 Required 6 Required 7 Require Required 1 Required 2 Raw materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING June Total 22,380 0.50 11,190 Raw Materials Budget April, May, and June 2017 April May Production budget (units) 17,500 21,420 Materials requirements per unit 0.50 0.50 Materials needed for production 8,750 10,710 Budgeted ending inventory 5,355 5,595 Total materials requirements (units) 14,105 16,305 Beginning inventory 4,375 5,355 Materials to be purchased 9,730 10,950 Material price per unit $ 21 Budgeted raw material purchases $ 204,330 $ 229,950 5,200 16,390 4,495 10,795 31,475 $ 21 $ 21 $ 226,695 $ 660,975 $ 21 Required 4 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Required Required 5 Required 6 Required 7 Factory overhead budget. (Round per unit values to 2 decimal places.) + ZIGBY MANUFACTURING Factory Overhead Budget April, May, and June 2017 April May 8,750 10,710 June Total Labor hours needed 11,190 $ 3.90 $ 3.90 $ 3.90 $ 34,125 $ Variable factory overhead rate Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead 41,769 $ 31,670 73,439 $ 43,641 $ 31,670 119,535 95,010 31,670 65,795 $ 75,311 $ 214,545 c. company policy calls for a given months ending tinisnea gooas inventory to equal 80% OT the next month's expected unit sales. The March 31 finished goods inventory is 17,840 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.90 per direct labor hour. Depreciation of $31,670 per month is treated as fixed factory overhead. f. Sales representatives' commissions are 10% of sales and are paid in the month of the sales. The sales manager's monthly salary is $4,200. g. Monthly general and administrative expenses include $24,000 administrative salaries and 0.9% monthly interest on the long-term note payable. h. The company expects 25% of sales to be for cash and the remaining 75% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale). i. All 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. j. The minimum ending cash balance for all months is $62,000. 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 $22,000 are to be declared and paid in May. 1. 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 $142,000 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.): 1. Sales budget. 2. Production budget. 3. Raw materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget