The production department of Zan Corporation has submitted the following forecast of units to be produced by
Question:
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |
Units to be produced | 9,000 | 12,000 | 11,000 | 10,000 |
In addition, 15,750 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 $5,600.
Each unit requires 7 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.50 per hour.
Required:
1-a. Prepare the company’s direct materials budget for the upcoming fiscal year. (Round "Unit cost of raw materials" answers to 2 decimal places.) Please also insert the year column after Quarter 4
Required production in units of finished goods | Quarter 1 | Quarter 2 | Quarter 3 | Quarter4 |
Units of Raw Materials Needed to meet production | ||||
Units of Raw Materials needed per unit finished goods | ||||
Add desired Units of ending raw material | ||||
Total Units of raw material needed | ||||
? | ||||
Units of raw material to be purchased | ||||
Unit cost of raw material | ||||
Cost of raw material to be purchased | ||||
*The chart ends after cost of raw materials to be purchased*
1-b. Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.
Beg. Balance Account Payable | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 | Year | |
1st Quarter Purchases | ||||||
2nd Quarter Purchases | ||||||
3rd Quarter Purchases | ||||||
4th Quarter Purchases | ||||||
Total cash disbursement |
2. 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.) Please also add the year column next to it. Thank you!
Required Production in units | Quarter 1 | Quarter 2 | Quarter 3 | Quarter 4 |
Direct Labor Hours per unit | ||||
Total Direct Labor cost per hour | ||||
Direct Labor Cost per hour | ||||
Total Direct Labor Cost |
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer