ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash $ 42,000 Accounts receivable 364,000 Raw materials inventory 107,200 Finished goods inventory 349,440 Total current assets 862,640 Equipment 604,000 Accumulated depreciation (152,000) Equipment, net 452,000 Total assets $1,314,540 Liabilities and Equity Accounts payable $ 211,300 Shortterm notes payable 14,000 Total current liabilities 225,300 Longterm note payable 510,000 Total liabilities 735,300 Common stock 337,000 Retained earnings 242,340 Total stockholders' equity 579,340 Total liabilities and equity $1,314,640 a. Sales for March total 20,800 units. Forecasted sales in units are as follows: April, 20,800; May, 21,600; June, 20,900; and July, 20,800. Sales of 242,000 units are forecasted for the entire year. The \"'5 selling price is $25.00 per unit and its total 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 5,360 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,200 units. Raw materials cost $20 per unit. Each nished unit requires 0.50 units of raw materials. c. Company policy calls for a given month's ending nished goods inventory to equal 80% of the next month's expected unit sales. The March 31 finished goods inventory is 16,640 units, which complies with the policy. (I. Each finished unit requires 0.50 hours of direct labor at a rate of $17 per hour. 9. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.00 per direct labor hour. Depreciation of $21,100 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 manager's monthly salary is $3,200. 9. Monthly general and administrative expenses include $14,000 administrative salaries and 0.7% monthly interest on the long-term note payable. h. The company expects 30% of sales to be for cash and the remaining 70% 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. i. The minimum ending cash balance for all months is $42,000. If necessary, the company borrows enough cash using a shortterm note to reach the minimum. Shortterm notes require an interest payment of 1% at each monthend (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 $12,000 are to be declared and paid in May. . 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. n1. Equipment purchases of $132,000 are budgeted for the last day of June. ZIGBY MANUFACTURING Revised Raw Materials Budget April May June Total Production budget (units) 21,440 21,040 20,820 Materials requirements per unit (unchanged from connect) 0.50 0.50 0.50 Materials needed for production 10,720 10,520 10,410 Budgeted ending inventory 3,156 3,123 4,200 Total materials requirements (units) 13,876 13,643 14,610 Beginning inventory 5,360 3,156 3, 123 Materials to be purchased 8,516 10,487 11,487 30,490 Material price per unit $20.00 $20.00 $20.00 $20.00 Raw Material purchases before Discount $170,320.00 $209,740.00 $229,740.00 | $609,800.00 Discount (5% of purchases exceeding 10,000 lbs) $487 $1,487.00 $1,974.00 Budgeted raw material purchases $170,320.00 $209,253.00 $228,253.00 $607,826.00ZIGBY MANUFACTURING Change to smooth Production Budget April, May, and June 2019 April May June Total Budgeted ending inventory (calculate for April, row 3 of connect for May and June) 25,280 16,720 16,640 Budgeted units sales for month 20,800 43,200 20,900 Required units of available production 46,080 59,920 37,540 Beginning inventory (units) 16,640 25,280 16,720 Units to be produced during the month 29,440 34,640 20,820 84,90010) Connect gives a \"total product cost\" per unit that is used to calculate the ending inventory value and cost of goods sold. This per unit cost includes xed overhead costs assuming the quarter's original production and sales levels. This average will change because of the onetime sale. Zigby Manufacturing uses weighted average costing for its inventory. Because Zigby does not have any Work-InProcess inventory, we can assume that all production costs ow to nished goods and then to cost of goods sold. a) Follow the directions below the table to calculate the revised weighted average cost per unit. Costs: March 31 Finished Goods Inventory (connect) Raw Material used in production (calculated in 9) Budgeted Direct Labor costs (calculated in 4 including wage premium Budgeted Overhead Costs (calculated in 5.Both variable and xed) Total Costs of Finished Goods available for use sale (a) Units in 3i31 Finished Goods Inventory (connect) Units produced during quarter (from 2) Weighted-Ave rage Cost per unit (a)/(b) show 2 decimals b) Use the weighted average cost per unit to allocate costs between 6130 nished goods inventory and COGS. Weighted-average cost per unit Allocated costs