Question

beginning RM inventory (in units) Quantity of DM needed per unit M cost per pound Hesired ending RM inventory/next quarter's RM needs desired ending RM inventory at year-end 24,000 pounds 20.00 pounds $0.30 dollars 15% 30,000 pounds Cash payments to suppliers: paid in the quarter of purchase paid in the quarter following purchase 40% of the purchases 60% of the purchases L hours per unit Late per hour 0.24 hours $12.00 dollars Manufacturing overhead Variable MOH Fixed MOH $5.00 per DLH $24,000 per quarter Jon cash MOH Depreciation $17,000 per quarter

Direct materials budget required production in units of finished goods units of raw materials needed per unit of finished goods units of raw materials needed to meet production desired units of ending materials needed total units of raw materials needed less units of beginning raw materials inventory units of raw materials to be purchased unit cost of raw materials cost of raw materials to be purchased Schedule of Expected Cash Disbursements for Purchases of Materials beginning accounts payable first-quarter purchases second-quarter purchases third-quarter purchases fourth-quarter purchases Total cash disbursements for materials Direct labor Budget

Answer 1

Direct Material Budget	Q1	Q2	Q3	Q4
Required production in units of Finished Goods (Assumed)	200	250	300	400
Units of raw-material needed per unit of FG	20	20	20	20
Units of raw-material needed to meet production	4000	5000	6000	8000
Desired units of ending material needed	27600	31740	36500	30000

Total units of raw-material needed	31600	36740	42500	38000
Less Units of beginning raw-material inventory	24000	27600	31740	36500
Units of raw-material to be purchased	7600	9140	10760	1500
Unit cost of raw-material	0.3	0.3	0.3	0.3
Cost of raw-material to be purchased	2280	2742	3228	450

Schedule of Expected cash disbursements for purchase of material
Beginning accounts payable	-	1,368	1,645	1,937
Purchase	2,280	2,742	3,228	450
Payment in the month of Purchase @ 40%	912	1,097	1,291	180
Payment in the following month @ 60%	1,368	1,645	1,937	270
Total cash disbursement for purchase	912	2,465	2,937	2,117
Closing accounts payable	1,368	1,645	1,937	270

Labour hr per unit 0.24	Q1	Q2	Q3	Q4
Direct labour hrs required	48	60	72	96
Rate per hr	12	12	12	12
Direct labour Cost	576	720	864	1152

Manufacturing OH	Q1	Q2	Q3	Q4
Variable OH @ $ 5 per DLH	240	300	360	480
Fixed	24000	24000	24000	24000

Direct Material Cost	2280	2742	3228	450
Direct Labour Cost	576	720	864	1152
Manucturing Variable OH	240	300	360	480
Manufacturing Fixed OH	24000	24000	24000	24000
Total Cost	27096	27762	28452	26082
No. Of units of FG	200	250	300	400
Cost per unit	135.48	111.05	94.84	65.20