ZIGBY MANUFACTURING Sales Budget April, May, and June 2019 Budgeted Budgeted Budgeted Unit Sales Unit Price Sales Dollars April 2019 25,000 $ 26.00 $ 650,000 May 2019 17,000 26.00 442,000 June 2019 22,400 26.00 582,400 Totals for the second quarter 64.400 $ 1,674,400 Total ZIGBY MANUFACTURING Production Budget April, May, and June 2019 April May Next month's budgeted sales (units) 17,000 22,400 Ratio of inventory to future sales 80% 80% Budgeted ending inventory (units) 13,600 17,920 Budgeted units sales for month 25,000 17,000 Required units of available production 38,600 34,920 Beginning inventory (units) 20,000 13,600 Units to be produced 18,600 21,320 June 25,000 80% 20,000 22,400 42,400 17.920 24,480 64,400 Required 1 Required 3 > Total ZIGBY MANUFACTURING Production Budget April, May, and June 2019 April May Next month's budgeted sales (units) 17,000 22,400 Ratio of inventory to future sales 80% 80% Budgeted ending inventory (units) 13,600 17,920 Budgeted units sales for month 25,000 17,000 Required units of available production 38,600 34,920 Beginning inventory (units) 20,000 13,600 Units to be produced 18,600 21,320 June 25,000 80% 20,000 22,400 42,400 17.920 24,480 64,400 Required 1 Required 3 > Budgeted production (units) Direct labor rate (per hour) Total labor hours needed Direct labor rate (per hour) Budgeted direct labor cost ZIGBY MANUFACTURING Direct Labor Budget April, May, and June 2019 April May June Total 18,600 21,320 24,480 0.50 0.50 0.50 9,300 10,660 12,240 32,200 $ 151 $ 155 156 15 $ 139,500 $ 159,900 $ 183,600 $ 483,000 Total Labor hours needed Variable factory overhead rate Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead ZIGBY MANUFACTURING Factory Overhead Budget April, May, and June 2019 April May 9,300 10,660 $ 4.60 $ 4.60 $ $ 42,780 $ 49,036 $ 39,710 39,710 $ 82,490 $ 88,746 $ June 12,240 4.60 56,304 39,710 96,014 $ 148,120 119,130 267,250 $ The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019. ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets 59. eee 487, see 93,818 433.ee 1,872,518 638.ee (169, eee) 469, ese $ 1,541,510 215.418 Accumulated depreciation Equipment, net Total assets sabilities 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 776,418 354, ne 411.12 765, 120 $1.541,510 To prepare a master budget for April, May, and June of 2019, management gathers the following information. a. Sales for March total 25.000 units. Forecasted sales in units are as follows: April, 25.000: May. 17.000: June, 22.400; and July. 25,000. Sales of 259,000 units are forecasted for the entire year. The product's selling price is $26.00 per unit and its total product cost is $21.65 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 4,650 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5.900 units. Raw materials cost $20 per unit. Esch 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 20.000 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor ata rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $4.60 per direct labor hour. Depreciation of $39.710 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 manager's monthly salary is $4.900 g. Monthly general and administrative expenses include 534,000 administrative salaries and 0.8% 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 sole (none are collected in the month of the sole). 1. 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 $98.000. 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 $29,000 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 $149,000 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. 8. Cosh budget. 9. Budgeted income statement for the entire second quarter (not for each month separatelyl- 10. Budgeted balance sheet. Complete this question by entering your answers in the tabs below. Budgeted income statement for the entire second quarter (not for each month separately). (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2019 Operating expenses Total operating expenses ZIGBY MANUFACTURING Budgeted Balance Sheet June 30, 2019 Assets Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity (Required 9 Required 10 Total ZIGBY MANUFACTURING Production Budget April, May, and June 2019 April May Next month's budgeted sales (units) 17,000 22,400 Ratio of inventory to future sales 80% 80% Budgeted ending inventory (units) 13,600 17,920 Budgeted units sales for month 25,000 17,000 Required units of available production 38,600 34,920 Beginning inventory (units) 20,000 13,600 Units to be produced 18,600 21,320 June 25,000 80% 20,000 22,400 42,400 17.920 24,480 64,400 Required 1 Required 3 > Budgeted production (units) Direct labor rate (per hour) Total labor hours needed Direct labor rate (per hour) Budgeted direct labor cost ZIGBY MANUFACTURING Direct Labor Budget April, May, and June 2019 April May June Total 18,600 21,320 24,480 0.50 0.50 0.50 9,300 10,660 12,240 32,200 $ 151 $ 155 156 15 $ 139,500 $ 159,900 $ 183,600 $ 483,000 Total Labor hours needed Variable factory overhead rate Budgeted variable overhead Budgeted fixed overhead Budgeted total overhead ZIGBY MANUFACTURING Factory Overhead Budget April, May, and June 2019 April May 9,300 10,660 $ 4.60 $ 4.60 $ $ 42,780 $ 49,036 $ 39,710 39,710 $ 82,490 $ 88,746 $ June 12,240 4.60 56,304 39,710 96,014 $ 148,120 119,130 267,250 $ The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019. ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets 59. eee 487, see 93,818 433.ee 1,872,518 638.ee (169, eee) 469, ese $ 1,541,510 215.418 Accumulated depreciation Equipment, net Total assets sabilities 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 776,418 354, ne 411.12 765, 120 $1.541,510 To prepare a master budget for April, May, and June of 2019, management gathers the following information. a. Sales for March total 25.000 units. Forecasted sales in units are as follows: April, 25.000: May. 17.000: June, 22.400; and July. 25,000. Sales of 259,000 units are forecasted for the entire year. The product's selling price is $26.00 per unit and its total product cost is $21.65 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 4,650 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5.900 units. Raw materials cost $20 per unit. Esch 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 20.000 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor ata rate of $15 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $4.60 per direct labor hour. Depreciation of $39.710 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 manager's monthly salary is $4.900 g. Monthly general and administrative expenses include 534,000 administrative salaries and 0.8% 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 sole (none are collected in the month of the sole). 1. 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 $98.000. 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 $29,000 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 $149,000 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. 8. Cosh budget. 9. Budgeted income statement for the entire second quarter (not for each month separatelyl- 10. Budgeted balance sheet. Complete this question by entering your answers in the tabs below. Budgeted income statement for the entire second quarter (not for each month separately). (Round your final answers to the nearest whole dollar.) ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30, 2019 Operating expenses Total operating expenses ZIGBY MANUFACTURING Budgeted Balance Sheet June 30, 2019 Assets Total current assets Equipment, net Total assets Liabilities and Equity Liabilities Total current liabilities Stockholders' Equity Total Stockholders' Equity Total Liabilities and Equity (Required 9 Required 10