ZIGBY MANUFACTURING Balance Sheet March 31 Assets Liabilities and Equity Cash $ 65,000 Liabilities Accounts receivable 399, 000 Accounts payable $ 204, 500 Raw materials inventory 90, 200 Loan payable 27,000 Finished goods inventory 308, 028 Long-term note payable 500, 000 $ 731, 500 Equipment $ 630,000 Equity Less: Accumulated depreciation 165, 000 465, 000 Common stock 350,000 Retained earnings 245, 728 595, 728 Total assets $ 1, 327, 228 Total liabilities and equity $ 1, 327, 228 To prepare a master budget for April, May, and June, management gathers the following information. a. Sales for March total 22,800 units. Budgeted sales in units follow: April, 22,800; May, 16,000; June, 23,000; and July, 22,800. The product's selling price is $25.00 per unit and its total product cost is $19.30 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 4,510 pounds. The budgeted June 30 ending raw materials inventory is 5,500 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 70% of the next month's budgeted unit sales. The March 31 finished goods inventory is 15,960 units. d. Each finished unit requires 0.50 hour of direct labor at a rate of $11 per hour. e. The predetermined variable overhead rate is $4.20 per direct labor hour. Depreciation of $35,020 per month is the only fixed factory overhead item. f. Sales commissions of 10% of sales are paid in the month of the sales. The sales manager's monthly salary is $4,500. g. Monthly general and administrative expenses include $27,000 for administrative salaries and 0.6% 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 full in the month following the sale (no credit sales are collected in the month of sale).i. 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 $65000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of1% at each monthend (before any repayment}. lfthe monthend preliminary cash balance exceeds the minimum, the excess will be used to repay any loans. k. Dividends of $25,000 are budgeted to be declared and paid in May. I. No cash payments tor 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 $100000 are budgeted for the last day of June. 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. Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Sales budget. ZIGBY MANUFACTURING Sales Budgets April May June Budgeted sales units 22,800 ( $ 16,000 $ 23,000 Selling price per unit 25.00 S 25.00 $ 25.00 Total budgeted sales $ 570,000 $400,000 $ 575,000Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 Production budget. ZIGBY MANUFACTURING Production Budget April May June Total Budgeted sales units 194,700 X 218,800 X 224,300 X Add: Desired ending inventory v Next period budgeted sales units 16,000 23,000 22,800 Ratio of inventory to future sales 70% 70% 70% Desired ending inventory units 22,800 X 16,000 x 23,000 X Total required units 11,200 X 16, 100 X 15,960 X Add: Beginning inventory units X 34,000 X 32, 100 X 38,960 X Units to produce 18,040 v 20,900 V 22,860 61,800Req 1 Req 2 Req 3 Reg 4 Req 5 Req 6 Reg 7 Req 8 to 10 Req 11 Req 12 Direct materials budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Materials Budget April May June Total Units to produce 18,040 20,900 V 22,860 Materials required per unit (pounds) V 0.50 v 0.50 0.50 Materials needed for production (pounds) 9,020 10,450 11,430 Add: Beginning materials inventory X 5,225 V 5,715 5,500 V Total materials required (pounds) 14,245 16,165 16,930 Less: Beginning materials inventory v (4,510) (5,225) V (5,715) V Materials to purchase (pounds) 9,735 V 10,940 11,215 31,890 Materials cost per pound S 20 V $ 20 S 20 $ 20 Cost of direct materials purchases 194,700 $ 218,800 S 224,300 $ 637,800Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 to 10 Req 11 Req 12 Direct labor budget. (Round per unit values to 2 decimal places.) ZIGBY MANUFACTURING Direct Labor Budget April May June Total Units to produce 18,040 20,900 22,860 Direct labor hours required per unit V 0.50 0.50 V 0.50 V Direct labor hours needed 9,020 10,450 V 11,430 30,900 Direct labor hours required per unit X $ 11 $ 11 11 $ 11 Cost of direct labor 99,220 $ 114,950 $ 125,730 $ 339,900Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 to 10 Req 11 Req 12 Factory overhead budget. (Round variable overhead rate values to 2 decimal places.) ZIGBY MANUFACTURING Factory Overhead Budget April May June Total Direct labor hours needed 9,020 V 10,450 11,430 V Variable overhead rate per direct labor hour 4.20 $ 4.20 $ 4.20 V Budgeted variable overhead $ 37,884 43,890 48,006 129,780 Budgeted fixed overhead 35,020 V 35,020 35,020 105,060 Budgeted total factory overhead $ 72,904 $ 78,910 S 83,026 $ 234,840Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Reg 7 Req 8 to 10 Req 11 Req 12 Selling expense budget. ZIGBY MANUFACTURING Selling Expense Budget April May June Total Budgeted sales $ 570,000 $ 400,000 $ 575,000 Sales commission percent 10% V 10% 10% Sales commissions $ 57,000 $ 40,000 $ 57,500 $ 154,500 Sales salaries V 4,500 4,500 4,500 13,500 Total selling expenses $ 61,500 $ 44,500 $ 62,000 $ 168,000Req 1 Req 2 Req 3 Req 4 Req 5 Req 6 Req 7 Req 8 to 10 Req 11 Req 12 General and administrative expense budget. ZIGBY MANUFACTURING General and Administrative Expense Budget April May June Total Administrative salaries $ 27,000 $ 27,000 $ 27,000 81,000 Interest on long-term note 3,000 3,000 3,000 9,000 Total general and administrative expenses $ 30,000 $ 30,000 30,000 $ 90,000Reg 1 Reg 2 Reg 3 Reg 4 Reg 5 Reg 6 Reg ? Reg 8 to 10 Reg 11 Reg 12 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) Show lessA Sales $ 570,000 $ 400,000 $ 575,000 Cash receipts from Cash sales 6 6 6 Collections of prior period sales a 9 9 Total cash receipts $ 0 $ 0 $ 0 Materials purchases 3% 194,700 $ 218,800 $ 224,300 Cash payments for Current period purchases $ 519,000 6 $ 452,500 9 9 Prior period purchases 6 9 9 Total cash payments $ 519,000 $ 452,500 $ 0 Beginning cash balance 6 6 9 9 9 Total cash available Less: Cash payments for: _ 9 9 9 9 6 6 6 6 6 9 9 9 6 6 6 6 a o m 6 9 9 9 9 Total cash payments 0 O O 3re|iminary cash balance a 9 a 9 9 9 Ending cash balance a Loan balance Beginning ofmonth Additional loan (loan repayment) e Loan balance End of month 35 O Req 1 Reg 2 Req 3 Reg 4 Req 5 Reg 6 Reg 7 Req 8 to 10 Req 11 Req 12 Budgeted income statement for entire second quarter (not monthly). (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 X X X X X X Selling, general and administrative expenses X X X X X X X X X X Total operating expenses O X 0 X X X $ 0Reg 4 Req 12 Req 1 Req 2 Reg 3 Reg 5 Reg 6 Reg 7 Reg 8 to 10 Req 11 Budgeted balance sheet at June 30. (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Balance Sheet June 30 Assets X X X X X X X X X X X X 0 Total assets Liabilities and Equity Liabilities X X X X X X Equity