Exercise 8-11 Direct Materials and Direct Labor Budgets [LO4, LO5] The productio

Question

Exercise 8-11 Direct Materials and Direct Labor Budgets [LO4, LO5]





The production department of Priston Company 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

8,000

9,000

10,000

7,000




--------------------------------------------------------------------------------







In addition, the beginning raw materials inventory for the 1st Quarter is budgeted to be 2,400 pounds and the beginning accounts payable for the 1st Quarter is budgeted to be $15,200.




Each unit requires two pounds of raw material that costs $3.00 per pound. Management desires to end each quarter with a raw materials inventory equal to 15% of the following quarter

Explanation / Answer

1. Prepare the company's direct materials budget and schedule of expected cash disbursements for materials for the upcoming fiscal year. 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 forcasted number of units produced..

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.