Question

Problem 07-4A Manufacturing: Preparation of a complete master budget LO P1, P2, P3 The management of Zigby Manufacturing prepared the following estimated balance sheet for March 2019 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 40,000 342, 248 98,589 325,540 886,288 600,000 (15e,eee) 450,000 $ 1,256,288 $ 200,500 12,000 212.500 500,000 712.500 335.000 208,788 543,788 $ 1,256,288

Answer 1

Solution 1:

ZIGBY MANUFACTURING
Sales Budget
April, May, and June 2019
	Budgeted Unit Sales	Budgeted Unit Price	Budgeted Sales Dollars
Apr-19	20500	$23.85	$488,925.00
May-19	19500	$23.85	$465,075.00
Jun-19	20000	$23.85	$477,000.00
Totals for the second quarter	60000	$23.85	$1,431,000.00

Solution 2:

ZIGBY MANUFACTURING
Production Budget
April, May, and June 2019
	April	May	June
Next month's budgeted sales (units)	19500	20000	20500
Ratio of inventory to future sales	80%	80%	80%
Desired ending inventory	15600	16000	16400
Budgeted sales units	20500	19500	20000
Required units of available production	36100	35500	36400
Beginning inventory	16400	15600	16000
Units to be produced	19700	19900	20400

Solution 3:

ZIGBY MANUFACTURING
Raw Materials Budget
April, May, and June 2019
	April	May	June
Production budget (units)	19700	19900	20400
Raw material per unit	0.5	0.5	0.5
Materials needed for production	9850	9950	10200
Desired ending inventory	4975	5100	4000
Total materials requirements (units)	14825	15050	14200
Beginning inventory	4925	4975	5100
Materials to be purchased	9900	10075	9100
Material price per unit	$20.00	$20.00	$20.00
Budgeted raw material purchases	$198,000.00	$201,500.00	$182,000.00

Solution 4:

ZIGBY MANUFACTURING
Direct Labor Budget
April, May, and June 2019
	April	May	June	Total
Budgeted production (units)	19700	19900	20400	60000
Direct labor hour per unit	0.5	0.5	0.5	0.5
Total labor hours needed	9850	9950	10200	30000
Direct labor rate per hour	$15.00	$15.00	$15.00	$15.00
Budgeted direct labor cost	$147,750.00	$149,250.00	$153,000.00	$450,000.00

Solution 5:

ZIGBY MANUFACTURING
Factory overhead Budget
April, May, and June 2019
	April	May	June	Total
Labor hours needed	9850	9950	10200	30000
Variable overhead rate per hour	$2.70	$2.70	$2.70	$2.70
Budgeted variable overhead	$26,595.00	$26,865.00	$27,540.00	$81,000.00
Budgeted fixed overhead	$20,000.00	$20,000.00	$20,000.00	$60,000.00
Budgeted total overhead	$46,595.00	$46,865.00	$47,540.00	$141,000.00

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