The production department of Priston Company has submitted the following forecas
ID: 2449352 • Letter: T
Question
The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year. In addition, the beginning raw materials inventory for the 1st Quarter is budgeted to be 8,000 pounds and the beginning accounts payable for the 1st Quarter is budgeted to be $15,200. Each unit requires four pounds of raw material that costs $2.00 per pound. Management desires to end each quarter with a raw materials inventory equal to 25% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 5,250 pounds. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.75 direct labor-hours and direct labor-hour workers are paid $14 per hour. Prepare the company's direct materials budget for the upcoming fiscal year. (Input all amounts as positive values. Do not round intermediate calculations.) Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. Complete 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.Explanation / Answer
1a) Direct material Budget
1b)Schedule of expected cash disbursement for purchases
2)Dircect Labour Budget
Prision Company Direct Material budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Production Needs - Pounds(1) 8000 9000 10000 7000 34000 Total Needs - Pounds( Production needs X 4 Units)(2) 32000 36000 40000 28000 136000 Opening Raw material - Pounds(3) 8000 9000 10000 7000 Raw Material to be Purchased(4)=(2)+(5)-(3) 33000 37000 37000 26250 133250 Closing Raw Material (25% of (2))(5) 9000 10000 7000 5250 Cost Of raw material To be purchased (4)*$2 $66,000 $74,000 $74,000 $52,500 $266,500Related Questions
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