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 e produced 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 7,000 10,000 9,000 8,000 In addition, 8,750 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 $5,200. Each unit requires 5 grams of raw material that costs $1.60 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 6,000 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 $13.50 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.) | Zan Corporation Direct Materials Budget - 1st 2nd Quarter Quarter 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 3rd Quarter 4th Quarter Year Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials 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. Year Zan Corporation Schedule of Expected Cash Disbursements for Materials - 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Beginning accounts payable 1st Quarter purchases 2nd Quarter purchases 3rd Quarter purchases 4th Quarter purchases Total cash disbursements for materials

Answer 1

1.a

particulars	1st quarter	2nd quarter	3rd quarter	4th quarter	year
required production in unitsof goods	7000	10000	9000	8000	34000
units of raw material needed per unit of finished goods(grams)	5	5	5	5
units of raw material needed to meet production	35000	50000	45000	40000
add:stock of raw material needed to keep (25% of next quarter needs)	12500	11250	10000	6000	39750
total units of raw material needed	47500	61250	55000	46000
less:opening stock in each quarter	8750	12500	11250	10000	42500
units of rawmaterials to be purchased	38750	48750	43750	36000
unit cost of rawmaterial	1.6	1.6	1.6	1.6
cost of rawmaterial to be purchased	62000	78000	70000	57600

1.b

particulars	1st quarter	2nd quarter	3rd quarter	4th quarter	year
beginning accounts payable	5200
1st quarters purchases	37200	24800
2nd quarter purchases		46800	31200
3rd quarter purchases			42000	28000
4th quarter purchases				34560
total cash disbursement for materials	42400	71600	73200	62560	249760

2.

particulars	1st quarter	2nd quarter	3rd quarter	4th quarter	year
required production in units	7000	10000	9000	8000
direct labour hours per unit	0.2	0.2	0.2	0.2
total direct labour hours needed	1400	2000	1800	1600
direct labour cost per hour	13.5	13.5	13.5	13.5
total direct labour cost	18900	27000	24300	21600	91800