Problem 22-2A (continued)
(2)
BUILT-TIGHT
Cash Budget
For July, August, and September
July August Sept.
Beginning cash balance*………………………. $15,000 $15,000 $25,504
Cash disbursements
Payments for direct materials………………… 16,160 13,440 13,760
Interest on bank loan**
July (5,000 x 1%)…………………………………
50
46
_______
Problem 22-3A (50 minutes)
Part 1
MERLINE MANUFACTURING
Budgeted Income Statement
For Months of January, February, and March, 2016
January February March
Sales*………………………………………………$2,062,500 $2,268,750 $2,495,625
Cost of goods sold*………………………….. 1,237,500 1,361,250 1,497,375
Gross profit……………………………………… 825,000 907,500 998,250
Expenses
* Volume for the next three months increases by 10% per month
Sales Cost of Goods
Units (@ $125) Sold (@ $75)
Part 2: Analysis Component
The plan for increasing sales volume by reducing the price and increasing
advertising would cause the company to generate less net income in each of the
Problem 22-4A (130 minutes)
Part 1
ZIGBY MANUFACTURING
Sales Budgets
April, May, and June 2015
Budgeted
Units
Budgeted
Unit Price
Budgeted
Total Dollars
April 2015……………………………………………………20,500 $23.85 $ 488,925
Part 2
ZIGBY MANUFACTURING
Production Budget
April, May, and June 2015
April May June Total
Next month’s budgeted sales…………… 19,500 20,000 20,500
Ratio of inventory to future sales……… x 80% x 80% x 80%
Budgeted ending inventory……………… 15,600 16,000 16,400
Problem 22-4A (continued)
Part 3
ZIGBY MANUFACTURING
Raw Materials Budget
April, May, and June 2015
April May June Total
Production budget (units)………………… 19,700 19,900 20,400
Materials requirement per unit…………. x 0.50 x 0.50 x 0.50
Part 4
ZIGBY MANUFACTURING
Direct Labor Budget
April, May, and June 2015
April May June Total
Budgeted production (units)…………….. 19,700 19,900 20,400
Labor requirements per unit (hours).... x 0.50 x 0.50 x 0.50
Part 5
ZIGBY MANUFACTURING
Factory Overhead Budget
April, May, and June 2015
April May June Total
Labor hours needed……………………….. 9,850 9,950 10,200
Problem 22-4A (continued)
Part 6
ZIGBY MANUFACTURING
Selling Expense Budgets
April, May, and June 2015
April May June Total
Budgeted sales……………………………….$488,925 $465,075 $477,000
Sales commission percent………………x 8% x 8% x 8%
Part 7
ZIGBY MANUFACTURING
General and Administrative Expense Budgets
April, May, and June 2015
April May June Total
Salaries………………………………………………$12,000 $12,000 $12,000 $36,000
Problem 22-4A (Continued)
Part 8
ZIGBY MANUFACTURING
Cash Budgets
April, May, and June 2015
April May June
Beginning cash balance……………………………….$ 40,000 $ 83,346 $124,295
Cash receipts from customers (note A)……………. 488,925 481,770 468,653
Total cash available……………………………………..528,925 565,116 592,948
Cash disbursements
Payments for raw materials (note B)………………200,500 198,000 201,500
Payments for direct labor……………………………
147,750
149,250
153,000
Supporting calculations April May June Total
Note A: Cash receipts from customers
Total sales………………………………………………..$488,925 $465,075 $477,000 $1,431,000
Cash sales (30%)……………………………………… 146,677 139,522 143,100 429,299
Credit sales (70%)…………………………………….. 342,248 325,553 333,900 1,001,701
Cash collections
NOTE: Cash sales are rounded down to the nearest whole dollar. All other amounts are rounded
up to the nearest whole dollar. Student answers will vary slightly if they round differently.
Problem 22-4A (Continued)
Part 9
ZIGBY MANUFACTURING
Budgeted Income Statement
For Three Months Ended June 30, 2015
Sales…………………………………………………………………… $1,431,000
Cost of goods sold (60,000 units @ $19.85)…………… 1,191,000
Gross profit…………………………………………………………. 240,000
Operating expenses
Sales commissions……………………………………………. $114,480
Part 10
ZIGBY MANUFACTURING
Budgeted Balance Sheet
June 30, 2015
ASSETS
Cash………………………………………………….. $ 40,000 Cash budget
Accounts receivable…………………………… 333,900 Note C
Note D
LIABILITIES AND EQUITY
Accounts payable………………………………. $ 182,000 Note H
Bank loan payable………………………………. 16,752 Cash budget
