The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015:

ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015
Assets
Cash	$	51,000
Accounts receivable		483,600
Raw materials inventory		94,100
Finished goods inventory		443,520
Total current assets		1,072,220
Equipment, gross		622,000
Accumulated depreciation		(161,000)
Equipment, net		461,000
Total assets	$	1,533,220
Liabilities and Equity
Accounts payable		211,400
Short-term notes payable		23,000
Total current liabilities	$	234,400
Long-term note payable		515,000
Total liabilities		749,400
Common stock		346,000
Retained earnings		437,820
Total stockholders equity		783,820
Total liabilities and equity	$	1,533,220

To prepare a master budget for April, May, and June of 2015, 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; July, 24,000. Sales of 251,000 units are forecasted for the entire year. The products selling price is $31.00 per unit and its total product cost is $26.40 per unit.
b.	Company policy calls for a given months ending raw materials inventory to equal 50% of the next months 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 months ending finished goods inventory to equal 70% of the next months 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 managers 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 is collected in the month of the sale).
i.	All raw materials purchases are on credit, and no payables arise from any other transactions. One months raw materials purchases are fully paid in the next month.
J.	The minimum ending cash balance for all months is $99,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.
K.	Dividends of $21,000 are to be declared and paid in May.

l.

No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 40% in the quarter and paid in the third calendar quarter.

m.

Equipment purchases of $141,000 are budgeted for the last day of June. Required: Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar: Sales Budget Production Budget Raw Materials Budget Direct Labor Budget Factory Overhead Budget Selling Expense Budget General and Administrative Expense Budget Cash Budget & Calculations of Cash Receipts from Customers Budgeted Income Statement Budgeted Balance Sheet Sales Budget Budgeted Unit Sales Budgeted Unit Price Budgeted Total Dollars April 2015 24,000 $31.00 744,000 May 2015 16,600 31.00 514,600 June 2015 22,200 31.00 688,200 Totals for the quarter 62,800 1,946,800 Production Budget April May June Total Next month's budgeted sales (units) 16,600 22,200 24,000 Ratio of inventory to future sales 70% 70% 70% Budgeted ending inventory (units) 11,620 15,540 16,800 Budgeted units sales for month 24,000 16,600 22,200 Required units of available production 35,620 32,140 39,000 Beginning inventory (units) 16,800 11,620 15,540 Units to be produced 18,820 20,520 23,460 Raw Materials Budget April May June Total Production Budget (units) 18,820 20,520 23,460 Materials requirements per unit .50 .50 .50 Materials needed for production 9,410 10,260 11,730 Budgeted ending inventory 5,130 5,865 5,100 Total materials requirements (units) 14,540 16,125 16,830 Beginning inventory 4,705 5,130 5,865 Materials to be purchased 9,835 10,995 10,965 31,795 Materials price per unit $20 $20 $20 $20 Total cost of direct material purchases $196,700 $219,900 $219,300 $635,900 Direct Labor Budget April May June Total Budgeted production (units) 18,820 20,520 23,46 Labor requirements per unit (hours) .50 .50 .50 Total labor hours needed 9,410 10,260 11,730 31,400 Labor rate (per hour) $26 $26 $26 $26 Labor dollars $244,660 $266,760 $304,980 $816,400