Question

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Units to be produced:

1st Quarter = 5,400
2nd Quarter = 8,400
3rd Quarter = 7,400
4th Quarter = 6,400

In addition, 6400 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is 3280. Each unit requires 8.40 grams of raw material that costs $1.40 per gram. Management desires to end each quarter with an inventory of raw materials equal to 30% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 8400 grams. Management plans to pay for 50% of raw material purchases in the quarter acquired and 50% in the following quarter. Each unit requires 0.30 direct labor-hours and direct laborers are paid $10.70 per hour.

1.Prepare the company's direct materials budget for the upcoming fiscal year (Round "Unit cost of raw materials" answers to 2 decimal places).
2.Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
3.Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor-hours per unit" and "Direct labor cost per hour" answers to 2 decimal places.)

Answer 1