Question

ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2019 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment Accumulated depreciation Equipment, net Total assets Liabilities 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 $ 51,000 483, 600 94,100 443,520 1,072,220 622,000 (161,000) 461,000 $1,533, 220 $ 211,400 23,000 234,400 515,000 749,400 346,000 437,820 783,820 $1,533,220 To prepare a master budget for April, May, and June of 2019, management gathers the following information. a. Sales for March total 24,000 units. Forecasted sales in units are as follows: April, 24,000; May, 16,600; June, 22,200; and July, 24,000. Sales of 251,000 units are forecasted for the entire year. The product's selling price is $31.00 per unit and its total product cost is $26.40 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 4,705 units, which complies with the policy. The expected June 30 ending raw materials inventory is 5,100 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials. c. Company policy calls for a given month's ending finished goods inventory to equal 70% of the next month's expected unit sales. The March 31 finished goods inventory is 16,800 units, which complies with the policy. d. Each finished unit requires 0.50 hours of direct labor at a rate of $26 per hour. e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $3.80 per direct labor hour. Depreciation of $31,400 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 $4,100. g. Monthly general and administrative expenses include $25,000 administrative salaries and 0.8% monthly interest on the long-term note payable. h. The company expects 35% of sales to be for cash and the remaining 65% 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

Answer 1

Dear Student,

As per the HOMEWORKLIB POLICY, only the first four questions should be answered. Kindly take note of it.

Part 1		Sales budget
	ZIGBY MANUFACTURING Sales Budget April, May, and June 2019 Budgeted Unit Sales Budgeted Unit Price Budgeted Total Dollars April 2013 24000 $31.00 744000 May 2013 16600 31.00 514600 June 2013 22200 31.00 688200 Totals for the quarter 62800 $1946800

Part 2

Production Budget

ZIGBY MANUFACTURING Production Budget April, May, and June 2019 April May June Total Next month's budgeted sales (units) 16600 22200 24000 Ratio of inventory to future sales 70% 70% 70% Budgeted ending inventory (units) 11620 15540 16800 Budgeted units sales for month 24000 16600 22200 Required units of available production 35620 32140 39000 Beginning inventory (units) (16800) (11620) (15540) Units to be produced 18820 20520 23460 62800

Part 3

Part 3

Raw materials budget

ZIGBY MANUFACTURING Raw Materials Budget April, May, and June 2019 April May June Total Production budget (units) 18820 20520 23460 Materials requirements per unit 0.50 0.50 0.50 Materials needed for production 9410 10260 11730 Budgeted ending inventory 5130 5865 5100 Total materials requirements (units) 14540 16125 16830 Beginning inventory (4705) (5130) (5865) Materials to be purchased 9835 10995 10965 31795 Material price per unit $20 $20 $20 $20 Total cost of direct material purchases $196700 $219900 $219300 $635900

Part 4

Direct Labor Budget

ZIGBY MANUFACTURING Direct Labor Budget April, May, and June 2019 April May June Total Budgeted production (units) 18820 20520 23460 Labor requirements per unit (hours) 0.50 0.50 0.50 Total labor hours needed 9410 10260 11730 31400 Labor rate (per hour) $26 $26 $26 $26 Labor dollars $244660 $266760 $304980 $816400