The management of Zigby Manufacturing prepared the following estimated balance s

Question

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015 ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015 Assets Cash Accounts receivable Raw materials inventory Finished goods inventory $44,000 500,000 90,200 444,000 Total current assets Equipment, gross Accumulated depreciation 1.078,200 608,000 (154,000) Equipment, net 454,000 Total assets $1,532,200 Liabilities and Equity Accounts payable Short-term notes payable 211,300 16,000 $ 227,300 505,000 Total current liabilities Long-term note payable Total liabilities Common stock Retained earnings 732,300 339,000 460,900 Total stockholders' equity 799,900 Total liabilities and equity $1,532,200

Explanation / Answer

Required Budgets are as prepared below:

1. Sales Budget Zigby Manufacturing Sales Budget For the quarter ended June 30,2015 Month Particulars April May June Total Sale Units (a) 25,000 16,300 21,100 62,400 *Price per unit (b) $25.0 $25.0 $25.0 $25.0 Total Sales $625,000 $407,500 $527,500 1,560,000 Zigby Manufacturing Schedule of expected Cash collections For the quarter ended June 30,2015 Month Particulars April May June Total Beginning Accounts Receivable (a) 500,000 500,000 April Cash Sales 125,000 125,000 April Credit Sales 500,000 500,000 May Cash Sales 81,500 407,500 May Credit Sales 326,000 105,500 June Cash Sales 105,500 431,500 Total collections 625,000 581,500 431,500 1,206,500 2. Production Budget Zigby Manufacturing Production Budget For the quarter ended June 30,2015 Month Particulars April May June Total Sale Units (a) 25,000 16,300 21,100 62,400 Planned ending units (b) 13,040 16,880 20,000 20,000 Beginning units (c ) 20,000 13,040 16,880 20,000 Planned production units (d)= (a+b-c) 18,040 20,140 24,220 62,400 3. Raw material Budget Zigby Manufacturing Raw Material Purchase Budget For the quarter ended June 30,2015 Month Particulars April May June Total Planned production units (a) 18,040 20,140 24,220 62,400 *Direct Material required per unit (b) 0.5 0.5 0.5 0.5 Direct Material Required for production (c ) 9,020 10,070 12,110 31,200 Budgeted ending Direct Material (d) 5,035 6,055 4,400 4,400 Beginning Direct Material (e ) 4,510 5,035 6,055 4,510 Budgeted direct material purchase f= c+d-e 9,545 11,090 10,455 31,090 Cost per unit (g) $20 $20 $20 $20 BudgetedDM purchases $190,900 $221,800 $209,100 621,800 Zigby Manufacturing Schedule of expected Cash payments For the quarter ended June 30,2015 Month Particulars April May June Total Beginning Accounts Payable (a) $211,300 $211,300 April Purchases (b) $190,900 $190,900 May Purchases (c ) $221,800 $221,800 June Purchases (d) $0 Total payments (a+b+c+d) $211,300 $190,900 $221,800 $624,000 4. Direct labour Budget Zigby Manufacturing Direct Labour Budget For the quarter ended June 30,2015 Month Particulars April May June Total Planned production units (a) 18,040 20,140 24,220 62,400 *Direct labour required per unit (b) 0.5 0.5 0.5 0.5 Budgeted Direct labour hours 9,020 10,070 12,110 31,200 Cost per direct labour hour 19 19 19 19 Budgeted Direct labour Cost $171,380 $191,330 $230,090 $592,800 5. Factory Overhead Budget Zigby Manufacturing Factory Overhead Budget For the quarter ended June 30,2015 Month Particulars April May June Total Variable Factory Overhead: Budgeted Direct labour hours 9,020.0 10,070.0 12,110.0 31,200.0 Variable Overhead rate 3.1 3.1 3.1 3.1 Total Variable overhead 27,962 31,217 37,541 96,720 Fixed factory overhead    Depreciation 23,920 23,920 23,920 71,760    Rent Total fixed overhead Total factory overhead Less: Depreciation Cash disbursement for factory overhead 6. selling expense budget Zigby Manufacturing Selling expense Budget For the quarter ended June 30,2015 Month Particulars April May June Total Budgeted Sales 625,000 407,500 527,500 1,560,000 Sales commisssions (6% of sales) 37,500 24,450 31,650 93,600 Salaries 3,400 3,400 3,400 10,200 7. General and administrative expense budget Zigby Manufacturing General and administrative expense Budget For the quarter ended June 30,2015 Month Particulars April May June Total Administrative salaries 16,000 16,000 16,000 48,000 Interest (.5%) 4,040.0 4,040.0 4,040.0 12,120 Total expense 20,040 20,040 20,040 60,120 Zigby Manufacturing Cash Budget For the quarter ended June 30,2015 Month Particulars April May June Total Beginning Cash balance 44,000 181,258 287,421 44,000 Add: Collection from customers $625,000 $581,500 $431,500 $1,638,000 cash available for use $669,000 $762,758 $718,921 $1,682,000 Less: cash Disbursements Merchandise purchase $211,300 $190,900 $221,800 $624,000 Direct labour 171,380 191,330 230,090 $592,800 Manufacturing overhead 27,962 31,217 37,541 $96,720 sales commision 37,500 24,450 31,650 $93,600 Salaries 3,400 3,400 3,400 $10,200 Administrative saleries 16,000 16,000 16,000 $48,000 Interest on bond (508,000*.8%) 4,040 4,040 4,040 $12,120 Dividend paid 14,000 $14,000 Equipment purchase 134,000 $134,000 Total disbusrement 471,582 475,337 678,521 1,625,440 Cash surplus/Deficit 197,418 287,421 40,400 56,560 Financing    Borrowing 4,400 4,400    Repayment 16,000 16,000    Interest 160 160 Net cash from Financing -16,160 0 4,400 -11,760 Budgeted ending cash balance 181,258 287,421 44,800 44,800

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