Please just do parts 5-8. Thanks The management of Zigby Mannfacturing prepared
ID: 2584224 • Letter: P
Question
Please just do parts 5-8. Thanks
The management of Zigby Mannfacturing prepared the following estimated 2015: balance see ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015 Liabilities and Equity Assets $ 40,000 42,248 98,500 325,540 806,288 600,000 (150,000) 450,000 $1,256,288 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 . . . $1,256,288 $ 200,500 12,000 212,500 500,000 712,500 335,000 208,788 543,788 Cash Accounts receivable Finished goods inventory Total current assets Equipment, gross Accumulated depreciation ... quipment, net Total assets .. . . To preparc a master budget for A information April, May. and June of 2015, management gathers the following a. Sales for March total 20.500 units. Forecasted sales in units are as follows: April, 20,500; May, 19,500; June, 20,000: and July, 20,500. Sales of 240,000 units are forecasted for the entire year The product's selling price is $23.85 per unit and its total product cost is $19.85 per unit. b. Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's materials requirements. The March 31 raw materials inventory is 4,925 units, which com plies with the policy. The expected June 30 ending raw materials inventory is 4.000 units. Raw mate- rials cost $20 per unit. Each finished unit requires 0.50 units of raw materials C. Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's expected unit sales. The March 3l finished goods inventory is 16,400 units, which complies with the policy d. Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour e. Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 f. Sales representatives' commissions are 8% of sales and are paid in the month of the sales. The sale g. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9 h per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead. manager's monthly salary is $3,000 monthly interest on the long-term note payable The company expects 30% of sales to be for cash and the remaining 70% on credit Recev ables are collected in full in the month following the sale (none is collected in the month of the sale)Explanation / Answer
Answer 1. Sales Budget April May June Total Sales in Units 20,500 19,500 20,000 60,000 Sp Per Unit 23.85 23.85 23.85 23.85 Total Sales in $ 488,925.00 465,075.00 477,000.00 1,431,000.00 Cash Sales - 30% 146,677.50 139,522.50 143,100.00 429,300.00 Credit Sales - 70% 342,247.50 325,552.50 333,900.00 1,001,700.00 Schedule of Expected Cash Collections from Sales April May June Total Cash Sales - 30% 146,677.50 139,522.50 143,100.00 429,300.00 Collection from Accounts Receivables Accounts Receivable - Mar 31, 2015 342,248.00 342,248.00 April Sales 342,247.50 342,247.50 May Sales 325,552.50 325,552.50 June Sales Sales - - Total cash Collections 488,925.50 481,770.00 468,652.50 1,439,348.00 Answer 2. Merchandise Production Budget April May June Total Sales In units 20,500 19,500 20,000 60,000 Add: Closing Inventory in units - 80% 15,600 16,000 16,400 16,400 Total Needs 36,100 35,500 36,400 108,000 Less: Beginning Inventory in uints (16,400) (15,600) (16,000) (16,400) Required Units Produced 19,700 19,900 20,400 60,000 Answer 3. Raw Material Budget April May June Total Required Units Produced 19,700 19,900 20,400 60,000 Raw Material required per Unit 0.50 0.50 0.50 0.50 Total Raw Material Required 9,850 9,950 10,200 30,000 Add: Ending Inventory - 50% 4,975 5,100 4,000 4,000 Total Needs 14,825 15,050 14,200 34,000 Less: Beginning Inventory (4,925) (4,975) (5,100) (4,925) Total Raw Material Purchased 9,900 10,075 9,100 29,075 Cost per Unit - Raw Material 20 20 20 20 Cost of Raw Material Purchased 198,000 201,500 182,000 581,500 Schedule of Cash payments to Suppliers April May June Total Cash Payment Accounts Payable - March 31 200,500 200,500 April Purchases 198,000 198,000 May Purchases 201,500 201,500 Total Cash Payment to Suppliers 200,500 198,000 201,500 600,000 Answer 4. Direct Labor Budget April May June Total Required Units Produced 19,700 19,900 20,400 60,000 Direct Labor Hour per Unit 0.50 0.50 0.50 0.50 Total Direct Labor Hours Required 9,850 9,950 10,200 30,000 Cost per Direct Labor Hour 15 15 15 15 Direct Labor Cost 147,750 149,250 153,000 450,000 Answer 5. Factory Overhead Budget April May June Total Variable Overhead - $2.70 per DLH 26,595 26,865 27,540 81,000 Fixed Overhead - Depreciation 20,000 20,000 20,000 60,000 Total Overhead 46,595 46,865 47,540 141,000 Answer 6. Selling Expenses Budget April May June Total Sales Comm. - 8% 39,114 37,206 38,160 114,480 Sales Manager Salary 3,000 3,000 3,000 9,000 Total 42,114 40,206 41,160 123,480 Answer 7. General & Administarative Expenses Budget April May June Total Administrative Salaries 12,000 12,000 12,000 36,000 Interest on Long Term Notes Payable 4,500 4,500 4,500 13,500 Total 16,500 16,500 16,500 49,500 Answer 8. Cash budget April May June Total Opening cash Balance 40,000 83,347 124,296 40,000 Add: receipts Collection from Customers 488,926 481,770 468,653 1,439,348 Total Cash available 528,926 565,117 592,948 1,479,348 Less: Disbursements Cash Disbursement - Accounts Payable 200,500 198,000 201,500 600,000 Payment of Direct Labor 147,750 149,250 153,000 450,000 Payment of Variable Overhead 26,595 26,865 27,540 81,000 Selling Expenses 42,114 40,206 41,160 123,480 General & Admn. Expenses 16,500 16,500 16,500 49,500 Purchase of Equipment - - 130,000 130,000 Dividend Paid - 10,000 - 10,000 Total Disbursement 433,459 440,821 569,700 1,443,980 Cash Balance Closing 95,467 124,296 23,248 35,368 Add: Finance from Bank - - 17,000 17,000 Less: Payment to Bank (12,000) - - (12,000) Less: Payment of interet - Bank loan (120) - - - Net Cash Balance Closing 83,347 124,296 40,248 40,368