Problem 20-4A Manufacturing: Preparation of a complete master budget LO P1, P2,
ID: 2548105 • Letter: P
Question
Problem 20-4A 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:
3.
4.
5.
7.
8.
9.
10.
My attendance was spotty this week, in need of help in understanding where certain things go
ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2017 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment, gross Accumulated depreciation Equipment, net Total assets $ 69,800 432,008 86,000 348,488 935,488 614,906e 157,000 457,00e $ 1,392,480 Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term note payable Total 1liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity $ 178,700 19,000 197,788 515,008 712,708 342,800 337,780 679,78e $ 1,392,480Explanation / Answer
Solution:
Part 3 – Raw materials budget
Raw Materials Budget
April
May
June
Production Budget (units)
17,200
19,960
18,540
Materials requirement per unit
0.5
0.5
0.5
Materials needed for production
8600
9980
9270
Add: budgeted ending inventory (50% of the next months materials requirements)
4990
4635
4700
Total materials requirements (in feet)
13590
14615
13970
Less: Beginning Inventory (Ending Inventory of Previous Month)
4300
4990
4635
Materials to be purchased
9290
9625
9335
28250
Raw material cost per foot
$20.00
$20.00
$20.00
$20.00
Budgeted Cost of Raw material purchases
$185,800
$192,500
$186,700
$565,000
Part 4 – Direct labor budget
Direct Labor Budget
April
May
June
Budgeted Production Units
17200
19960
18540
Labor Requirement per unit (hours)
0.5
0.5
0.5
Total Direct Labor Hours needed
8600
9980
9270
Direct Labor Cost per hour
$22
$22
$22
Budgeted Direct Labor Cost
$189,200
$219,560
$203,940
$612,700
Part 5 – Factory Overhead Budget
Factory Overhead Budget
April
May
June
Labor Hours Needed
8600
9980
9270
Variable Overhead Rate per hour
$3.40
$3.40
$3.40
Budgeted Variable Overhead
$29,240
$33,932
$31,518
Budgeted Fixed Overhead
$27,850
$27,850
$27,850
Budgeted Total Overhead
$57,090
$61,782
$59,368
$178,240
Part 6 – General and administrative expense budget
General and administrative expense budget
April
May
June
Salary
$19,000
$19,000
$19,000
Interest on long term note payable (0.6% monthly x 515,000)
$3,090
$3,090
$3,090
Total Budgeted G&A expenses
$22,090
$22,090
$22,090
$66,270
Hope the above calculations, working and explanations are clear to you and help you in understanding the concept of question.... please rate my answer...in case any doubt, post a comment and I will try to resolve the doubt ASAP…thank you
Pls ask separate question for remaining parts.
Raw Materials Budget
April
May
June
Production Budget (units)
17,200
19,960
18,540
Materials requirement per unit
0.5
0.5
0.5
Materials needed for production
8600
9980
9270
Add: budgeted ending inventory (50% of the next months materials requirements)
4990
4635
4700
Total materials requirements (in feet)
13590
14615
13970
Less: Beginning Inventory (Ending Inventory of Previous Month)
4300
4990
4635
Materials to be purchased
9290
9625
9335
28250
Raw material cost per foot
$20.00
$20.00
$20.00
$20.00
Budgeted Cost of Raw material purchases
$185,800
$192,500
$186,700
$565,000
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