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The management of Zigby Manufacturing prepared the following balance sheet for March 31.

ZIGBY MANUFACTURING
Balance Sheet
March 31
Assets			Liabilities and Equity
Cash		$ 57,000	Liabilities
Accounts receivable		406,000	Accounts payable	$ 206,300
Raw materials inventory		91,600	Loan payable	29,000
Finished goods inventory		380,480	Long-term note payable	500,000	$ 735,300
Equipment	$ 634,000		Equity
Less: Accumulated depreciation	167,000	467,000	Common stock	352,000
			Retained earnings	314,780	666,780
Total assets		$ 1,402,080	Total liabilities and equity		$ 1,402,080

To prepare a master budget for April, May, and June, management gathers the following information.

Sales for March total 23,200 units. Budgeted sales in units follow: April, 23,200; May, 17,100; June, 21,900; and July, 23,200. The products selling price is $25.00 per unit and its total product cost is $20.50 per unit.

Raw materials inventory consists solely of direct materials that cost $20 per pound. Company policy calls for a given months ending materials inventory to equal 50% of the next months direct materials requirements. The March 31 raw materials inventory is 4,580 pounds. The budgeted June 30 ending raw materials inventory is 5,700 pounds. Each finished unit requires 0.50 pound of direct materials.

Company policy calls for a given months ending finished goods inventory to equal 80% of the next months budgeted unit sales. The March 31 finished goods inventory is 18,560 units.

Each finished unit requires 0.50 hour of direct labor at a rate of $13 per hour.

The predetermined variable overhead rate is $4.40 per direct labor hour. Depreciation of $37,320 per month is the only fixed factory overhead item.

Sales commissions of 5% of sales are paid in the month of the sales. The sales managers monthly salary is $4,700.

Monthly general and administrative expenses include $29,000 for administrative salaries and 0.8% monthly interest on the long-term note payable.

The company budgets 30% of sales to be for cash and the remaining 70% on credit. Credit sales are collected in full in the month following the sale (no credit sales are collected in the month of sale).

All raw materials purchases are on credit, and accounts payable are solely tied to raw materials purchases. Raw materials purchases are fully paid in the next month (none are paid in the month of purchase).

The minimum ending cash balance for all months is $57,000. If necessary, the company borrows enough cash using a loan to reach the minimum. Loans require an interest payment of 1% at each month-end (before any repayment). If the month-end preliminary cash balance exceeds the minimum, the excess will be used to repay any loans.

Dividends of $27,000 are budgeted to be declared and paid in May.

No cash payments for income taxes are budgeted in the second calendar quarter. Income tax will be assessed at 35% in the quarter and budgeted to be paid in the third calendar quarter.

Equipment purchases of $100,000 are budgeted for the last day of June.

Required: Prepare the following budgets for the months of April, May, and June: 1. Sales budget. 2. Production budget. 3. Direct materials budget. 4. Direct labor budget. 5. Factory overhead budget. 6. Selling expense budget. 7. General and administrative expense budget. 8. Schedule of cash receipts. 9. Schedule of cash payments for direct materials. 10. Cash budget. 11. Budgeted income statement for entire second quarter (not monthly). 12. Budgeted balance sheet at June 30.

Complete this question by entering your answers in the tabs below. Sales budget. ZIGBY MANUFACTURING Production Budget \begin{tabular}{|l|r|r|r|r|r|} \hline & \multicolumn{1}{|c|}{ April } & \multicolumn{1}{c|}{ May } & \multicolumn{1}{c|}{ June } & \multicolumn{1}{c|}{ Total } \\ \hline Budgeted sales units & & & & \\ \hline & & & & \\ \hline Next period budgeted sales units & 17,100 & 21,900 & 23,200 & \\ \hline Ratio of inventory to future sales & 80% & 80% & 80% & \\ \hline \multicolumn{1}{|r|}{ Desired ending inventory units } & & & & \\ \hline Total required units & & & & \\ \hline & & & & & \\ \hline Units to produce & & & & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|l|l|} \hline \multicolumn{2}{|c|}{ ZIGBY MANUFACTURING } \\ \hline Direct Materials Budget \\ \hline Units to produce & May & June & \\ \hline Materials needed for production (pounds) & & & & & \\ \hline Total materials required (pounds) & & & & & \\ \hline & & & & & \\ \hline Materials to purchase (pounds) & & & & \\ \hline Materials cost per pound & & & & \\ \hline Cost of direct materials purchases & & & & \\ \hline \end{tabular} ZIGBY MANUFACTURING Direct Labor Budget \begin{tabular}{|l|l|l|l|l|l|} \hline & April & May & June & Total \\ \hline Units to produce & & & & & \\ \hline Direct labor hours needed & & & & & \\ \hline & & & & & \\ \hline Cost of direct labor & & & & \\ \hline \end{tabular} Req 3 Req5> ZIGBY MANUFAC TURING Factory Overhead Budget \begin{tabular}{|l|c|c|c|c|c|} \hline & April & May & June & Total \\ \hline Direct labor hours needed & & & & \\ \hline Variable overhead rate per direct labor hour & & & & \\ \hline Budgeted variable overhead & & & & \\ \hline Budgeted fixed overhead & & & & \\ \hline Budgeted total factory overhead & & & & \\ \hline \end{tabular} \begin{tabular}{|l|r|r|c|c|c|} \hline \multicolumn{5}{|c|}{ ZIGBY MANUFACTURING } \\ \hline \multicolumn{3}{|c|}{ Selling Expense Budget } \\ \hline \multicolumn{1}{|c|}{ April } & May & June & \\ \hline Budgeted sales & & & & \\ \hline \multicolumn{1}{|l|}{} & & & & \\ \hline Sales commissions & & & & \\ \hline & & & & \\ \hline \hline \end{tabular} Req7> ZIGBY MANUFAC TURING General and Administrative Expense Budget \begin{tabular}{|l|c|c|c|c|c|} \hline & April & May & June & \\ \hline & & & & & \\ \hline & & & & & \\ \hline Total general and administrative expenses & & & & \\ \hline \end{tabular} ZIGBY MANUFACTURING Budgeted Income Statement For Three Months Ended June 30 Req 8 to 10 Req 12>

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