The production department of Zan Corporation has submitted the following forecas

Question

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 27,000 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 $7,400.

     Each unit requires 6 grams of raw material that costs $1.40 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 7,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.40 direct labor-hours and direct laborers are paid $14.50 per hour.

Prepare the company’s direct materials budget for the upcoming fiscal year. (Round "Unit cost of raw materials" answers to 2 decimal places.)

Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.

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 forecasted number of units produced. (Round "Direct labor-hours per unit" and "Direct labor cost per hour" answers to 2 decimal places.)

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Explanation / Answer

Zen company Direct Materials Budget 1st Quarter 2sd Quarter 3rd Quarter 4th Quarter Year Required production 18000 21000 20000 19000 78000 Raw materials per unit * 6 grm * 6 grm * 6 grm * 6 grm * 6 grm Production needs 108000 126000 120000 114000 468000 Add desired ending inventory 31500 30000 28500 7000 97000 Total needs 139500 156000 148500 121000 565000 Less beginning inventory 27000 31500 30000 28500 117000 Raw materials to be purchased 112500 124500 118500 92500 448000 Cost of raw materials to be purchased at $1.40 per po 157500 174300 165900 129500 627200 Zen company schedule of expected cash disbursements for purchases of materials Particular           $           $           $           $ Accounts payable, beginning balance 7400 7400 1st Quarter purchases 94500 63000 157500 nd Quarter purchases 104580 69720 174300 3rd Quarter purchases 99540 66360 165900 4th Quarter purchases 77700 77700 Total cash disbursements for materials 101900 167580 169260 144060 582800 Zen company Direct labour budget 1st Quarter 2sd Quarter 3rd Quarter 4th Quarter Year Units to be produced 18000 21000 20000 19000 78000 Direct labor time per unit (hours) 0.4 0.4 0.4 0.4 0.4 Total direct labor-hours needed 7200 8400 8000 7600 31200 Direct labor cost per hour 14.5 14.5 14.5 14.5 14.5 Total direct labor cost 104400 121800 116000 110200 452400

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

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