Question

Problem 22-4A 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: ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets $ Cash 46,000 Accounts receivable 386,925 96,290 327,831 Raw materials inventory Finished goods inventory Total current assets 857,046 Equipment, gross Accumulated depreciation Equipment, net 612,000 (156,000) 456,000 $1,313,046 Total assets Liabilities and Equity 196,190 18,000 214,190 Accounts payable Short-term notes payable $ Total current liabilities 506,000 720,190 341,000 Long-term note payable Total liabilities Common stock Retained earnings 251,856 592,856 Total stockholders' equity Total liabilities and equity $1,313,046

Answer 1

Solution 1:

ZIGBY MANUFACTURING
Sales Budget
April, May, and June 2017
	Budgeted Unit Sales	Budgeted Unit Price	Budgeted Sales Dollars
Apr-17	20100	$27.50	$552,750.00
May-17	18900	$27.50	$519,750.00
Jun-17	19700	$27.50	$541,750.00
Totals for the second quarter	58700	$27.50	$1,614,250.00

Solution 2:

ZIGBY MANUFACTURING
Production Budget
April, May, and June 2017
	April	May	June
Next month's budgeted sales (units)	18900	19700	20100
Ratio of inventory to future sales	70%	70%	70%
Desired ending inventory	13230	13790	14070
Budgeted sales units	20100	18900	19700
Required units of available production	33330	32690	33770
Beginning inventory	14070	13230	13790
Units to be produced	19260	19460	19980

Solution 3:

ZIGBY MANUFACTURING
Raw Materials Budget
April, May, and June 2017
	April	May	June
Production budget (units)	19260	19460	19980
Raw material per unit	0.5	0.5	0.5
Materials needed for production	9630	9730	9990
Desired ending inventory	4865	4995	4600
Total materials requirements (units)	14495	14725	14590
Beginning inventory	4815	4865	4995
Materials to be purchased	9680	9860	9595
Material price per unit	$20.00	$20.00	$20.00
Budgeted raw material purchases	$193,600.00	$197,200.00	$191,900.00

Solution 4:

ZIGBY MANUFACTURING
Direct Labor Budget
April, May, and June 2017
	April	May	June	Total
Budgeted production (units)	19260	19460	19980	58700
Direct labor hour per unit	0.5	0.5	0.5	0.5
Total labor hours needed	9630	9730	9990	29350
Direct labor rate per hour	$21.00	$21.00	$21.00	$21.00
Budgeted direct labor cost	$202,230.00	$204,330.00	$209,790.00	$616,350.00

Solution 5:

ZIGBY MANUFACTURING
Factory overhead Budget
April, May, and June 2017
	April	May	June	Total
Labor hours needed	9630	9730	9990	29350
Variable overhead rate per hour	$3.00	$3.00	$3.00	$3.00
Budgeted variable overhead	$28,890.00	$29,190.00	$29,970.00	$88,050.00
Budgeted fixed overhead	$25,440.00	$25,440.00	$25,440.00	$76,320.00
Budgeted total overhead	$54,330.00	$54,630.00	$55,410.00	$164,370.00

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