Question

BUDGET PROBLEM 50 HMK PTS DUE 12/08 Seved Problem 7-4A Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2017 50 points ZIGBY MANJFACTURING Estimated Balance Sheet March 31, 2817 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment, gross S 65,00e 437,760 90,200 308,828 900,988 630,800 PeferencesAccumulated depreciation (165,000) Equipment, net Total assets 465,000 $1,365,988 Liabilities and Equity Accounts payable Short-tera notes payable Total current liabilities Long-tere note payable Total liabilities Common stock Retained earnings Total stockholders equity Total liabilities and equity 284,580 7,080 231,500 515,800 46,500 350,000 269,488 $1,365,988 To prepare a master budget for April, May, and June of 2017, management gathers the following information a sales for March total 22,800 units. Forecasted sales n units are as follows. April, 22800, May·16,000. Ane, 23000, and My. 22.800 Sales of 255,000 units are forecasted for the entire year. The product's seling price is $24.00 per unit and its total product < Prev 10, 1H1 Noxt >

Answer 1

1			Sales budget
					April	May	June	Total
	Unit sales forecasted			1	22800	16000	23000
	Selling price per unit			2	24	24	24
	Sales in $			1*2	547200	384000	552000	1483200
2			Production budget
					April	May	June	Total	July
	Unit sales forecasted				22800	16000	23000		22800
	Add: Ending inventory				11200	16100	15960
	(70% of next month's expected unit sales)				(16000*70%)	(23000*70%)	(22800*70%)
					34000	32100	38960
	Less: Beginning inventory				15960	11200	16100
	(70% of current month's expected unit sales)				(22800*70%)	(16000*70%)	(23000*70%)
	Units to be produced				18040	20900	22860	61800
3			Raw materials budget
					April	May	June	Total
	Units to be produced			1	18040	20900	22860
	Raw matrial required for each finished unit 2				0.5	0.5	0.5
	Material requirements			1*2	9020	10450	11430
	Add: Ending inventory				5225	5715	5500
	(50% of next month's material requirements)				(10450*50%)	(11430*50%)	(given)
					14245	16165	16930
	Less: Beginning inventory				4510	5225	5715
	(50% of current month's material requirements)				(given)	(10450*50%)	(11430*50%)
	Raw materials to be purchased			3	9735	10940	11215	31890
	Cost per unit			4	20	20	20
	Raw materials in $			3*4	194700	218800	224300	637800
4			Direct labor budget
					April	May	June	Total
	Units to be produced			1	18040	20900	22860
	Direct labor hours required per unit                        2				0.5	0.5	0.5
	Direct labor hours required			3=1*2	9020	10450	11430
	Cost per hour			4	11	11	11
	Direct labor cost in $			3*4	99220	114950	125730	339900
5			Factory overhead budget
					April	May	June	Total
	Direct labor hours required			1	9020	10450	11430
	Predeterminer variable overhead rate per direct labor hour (2)				4.2	4.2	4.2
	Overhead allocated			3=1*2	37884	43890	48006
	Depreciation			4	35020	35020	35020
	Total factory overhead			3+4	72904	78910	83026	234840
6			Selling expense budget
					April	May	June	Total
	Sales in $			1	547200	384000	552000
	Sales commisssions @			2	10%	10%	10%
	Sales commisssions			3=1*2	54720	38400	55200
	Sales manager's salary			4	4500	4500	4500
	Total selling expense			3+4	59220	42900	59700	161820
7			General and administrative expense budget
					April	May	June	Total
	Administrative salaries			1	27000	27000	27000
	Interest on long-term note payable                                                       2				257.5	257.5	257.5
					(515000*0.6%*1/12)	(515000*0.6%*1/12)	(515000*0.6%*1/12)
	Total general and administrative expense                           1+2				27257.5	27257.5	27257.5	81772.5