The production department of Priston Company has submitted the following forecas
ID: 2465399 • 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 9,000 pounds and the beginning accounts payable for the 1st Quarter is budgeted to be $22,800.
Each unit requires three pounds of raw material that costs $3.00 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 8,250 pounds. Management plans to pay for 70% of raw material purchases in the quarter acquired and 30% in the following quarter. Each unit requires 0.25 direct labor-hours and direct labor-hour workers are paid $11 per hour.
Prepare the company’s direct materials budget for the upcoming fiscal year. (Do not round intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.)
Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year. (Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Complete the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Do not round intermediate calculations. Omit the "$" sign in your response.)
The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year.
Explanation / Answer
Cost of raw material To be purchased Ist Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Required production Units 12,000 13,000 14,000 11,000 50,000 Raw material required to produce one unit 3 3 3 3 3 Production needs 36,000 39,000 42,000 33,000 150,000 Add desire ending Inventory 9,750 10,500 8,250 8,250 8,250 Total needs 45,750 49,500 50,250 41,250 158,250 Less : Beginning Inventory 9000 9,750 10,500 8,250 9000 Raw material to be purchase 36,750 39,750 39,750 33,000 149,250 Cost of raw material per pound 3 3 3 3 3 Cost of raw material To be purchased 110,250 119,250 119,250 99,000 447,750 Schedule of expected cash disbursements of material Ist Quarter 2nd Quarter 3rd Quarter 4th Quarter Total beginning Accounts Payable 22800 22,800 Ist Quarter Purchase 77,175 33,075 110,250 2nd Quarter Purchase 83,475 35,775 119,250 3rd Quarter Purchase 83,475 35,775 119,250 4th Quarter Purchase 69,300 69,300 Total cash disbursements for material 99,975 116,550 119,250 105,075 440,850 Direct labour Budget Ist Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Required production Units 12,000 13,000 14,000 11,000 50,000 Labour required to produce one unit 0.25 0.25 0.25 0.25 0.25 Total Direct Labour Hours required 3000 3250 3500 2750 12,500 Rate per hour 11 11 11 11 11 Total Direct Labour Cost 33,000 35,750 38,500 30,250 137,500
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.