The production department of Hareston Company has submitted the following forecast of units to be produce by quarter for the upcoming fiscal year

In addition, the beginning raw materials inventory for the first quarter is budgets to be 1,400 pounds and the beginning accounts payables for the first quarter is budgeted to be $2,940.

Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desire ending inventory for the fourth quarter is 1,500 pounds. Managements plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours workers are paid $14.00 per hour.

1.         Prepare the company’s direct materials budget and schedule of expected cash disbursements for purchase of materials for the upcoming fiscal year.

2.         Prepare the company’s direct labor budget for the upcoming fiscals year, assuming that the direct labor workforce is adjust each quarter to match the number of hours required to produce the forecasted number numbers of units produce.

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2nd Quarter 4th Quarter 1st Quarter 3rd Quarter Units be to produced 8,000 6,000 5,000s 7,000