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 5,000 2nd Quarter 8,000 3rd Quarter 7,000 4th Quarter 6,000 Units to be produced In addition, 6,000 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 $2,880. Each unit requires 8 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 $11.50 per hour. Required: 1.82. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 and 2 Reg 3 Reg 4 Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year 46,000 X 8 X 8 X 8 X 32 X Estimated grams of raw material to be purchased Cost of raw materials to be purchased $ 55,200 X $ 24,000 $ 29,760 $ 25,920 $ 31,680 X

Answer 1

B D E F 8 8 8 8 A с 1 1&2) 2 Direct Materials Budget 3 1st quarter 2nd quarter 3rd quarter 4th quarter Year 4 Required production in units of finished goods 5,000 8,000 7000 6000 26,000 5 Units of raw materials needed per unit of finished goods 8 6 Units of raw materials needed to meet production 40,000 64,000 56,000 48,000 208,000 7 Add: Desired ending inventory 16,000 14,000 12,000 8,000 8,000 8 Total Units of raw materials needed 56,000 78,000 68,000 56,000 216,000 9 Less: Beginning inventory 6,000 16,000 14,000 12,000 6,000 10 Units of raw materials needed to be purchased 50,000 62,000 54,000 44,000 210,000 11 Uinit cost of raw materials $ 1.20 $ 1.20$ 1.20$ 1.20 $ 1.20 12 Cost of raw materials to be purchased $ 60,000 $ 74,400 $ 64,800 $ 52,800 $ 252,000 13 3) 14 Schedule of expected cash disbursements 15 1st quarter 2nd quarter 3rd quarter 4th quarter Year 16 From Beginning Accconts Payable $ 2,880 $ 2,880 17 1st quarter purchases $ 36,000 $ 24,000 $ 60,000 18 2nd quarter purchases $ 44,640 $ 29,760 $ 74,400 19 3rd quarter purchases $ 38,880 $ 25,920 $ 64,800 20 4th quarter purchases $ 31,680$ 31,680 21 Total cash disbursements of materials $ 38,880 $ 68,640 $ 68,640 $ 57,600 $ 233,760 224) 23 Direct Labor budget 24 1st quarter 2nd quarter 3rd quarter 4th quarter Year 25 Required production in units 5,000 8,000 7000 6000 26,000 26 Direct labor hours per unit 0.2 0.2 0.2 0.2 0.2 27 Total direct labor hours needed 1,000 1,600 1,400 1,200 5200 28 Direct labor cost per hour $ 11.50 $ 11.50 $ 11.50 $ 11.50 $ 11.50 29 Total direct labor cost $ 11,500 $ 18,400 $ 16,100 $ 13,800 $ 59,800

2. A B C D E F 1 182) 2 Direct Materials Budget 3 1st quarter 2nd quarter 3rd quarter 4th quarter Year 4 Required production in units of finished goods 5000 8000 7000 6000 =+B4+C4+D4+E4 5 Units of raw materials needed per unit of finished goods 8 8 8 8 8 6 Units of raw materials needed to meet production =+B4*B5 =+C4*C5 =+D4*D5 =+E4*E5 =+F4*F5 7 Add: Desired ending inventory =+C6*25% =+D6*25% =+E6*25% 8000 =+E7 8 Total Units of raw materials needed =+B6+B7 =+C6+C7 =+D6+D7 =+E6+E7 =+F6+F7 9 Less: Beginning inventory 6000 =+B7 =+C7 =+D7 =+B9 10 Units of raw materials needed to be purchased =+B8-B9 =+C8-C9 =+D8-09 =+E8-E9 =+F8-F9 11 Uinit cost of raw materials 1.2 1.2 1.2 1.2 1.2 12 Cost of raw materials to be purchased =+B10*B11 =+C10*c11 =+D10*D11 =+E10*E11 =+F10*F11 133) 14 Schedule of expected cash disbursements 15 1st quarter 2nd quarter 3rd quarter 4th quarter Year 16 From Beginning Accconts Payable 2880 =+B16 17 1st quarter purchases =+B12*60% =+B12*40% =+B17+C17 18 2nd quarter purchases =+C12*60% =+C12*40% =+C18+D18 19 3rd quarter purchases =+D12*60% =+D12*40% =+D19+E19 20 4th quarter purchases =+E12*60% =+E20 21 Total cash disbursements of materials =+B16+B17 =+C17+C18 =+D18+D19 =+E19+E20 =+B21+C21+D21+E21 22 4) 23 Direct Labor budget 24 1st quarter 2nd quarter 3rd quarter 4th quarter Year 25 Required production in units 5000 8000 7000 6000 =+B25+C25+D25+E25 26 Direct labor hours per unit 0.2 0.2 0.2 0.2 0.2 27 Total direct labor hours needed =+B25*B26 =+C25*C26 =+D25*D26 =+E25*E26 =+F25*F26 28 Direct labor cost per hour 11.5 11.5 11.5 11.5 11.5 29 Total direct labor cost =+B27*B28 =+C27*C28 =+D27*D28 =+E27 E28 =+F27*F28