Chapter 8 Homework ×I O n ezto.mheducation.com/fhm.tpx? -022559091553507926.1522
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Chapter 8 Homework ×I O n ezto.mheducation.com/fhm.tpx? -022559091553507926.1522374901932 The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year 1 st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 5,000 8,000 7,000 6,000 In addition, 6,000 grams of raw materials inventory is on hand at the start of t beginning accounts payable for the 1st Quarter is $2,880 he 1st Quarter and the 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-a. Prepare the company's direct materials budget for the upcoming fiscal year. (Round "Unit cost of raw materials" answers to 2 decimal places.) Zan Corporation Direct Materials Budget 1st Quarter 2nd 3rd Quarter QuarterQu Required production in units of finished goodsExplanation / Answer
1-a.
Zan Corporation
Direct Material Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Required production in units of finished goods
5,000
8,000
7,000
6,000
26,000
Units of raw materials needed per unit of finished goods
8
8
8
8
8
Units of raw materials needed to meet production
40,000
64,000
56,000
48,000
208,000
Add: Desired ending raw materials inventory
16,000
14,000
12,000
8,000
8,000
Total units of raw materials needed
56,000
78,000
68,000
56,000
216,000
Less: Beginning raw materials inventory
6,000
16,000
14,000
12,000
6,000
Units of raw materials to be purchased
50,000
62,000
54,000
44,000
210,000
Unit of cost of raw materials
$1.20
$1.20
$1.20
$1.20
$1.20
Cost of raw materials to be purchased
$ 60,000
$74,400
$64,800
$52,800
$ 252,000
1-b.
Zan Corporation
Direct Material Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Beginning account payable
$ 2,880
$2,880
1st Quarter purchases
$ 36,000
$ 24,000
$ 60,000
2nd Quarter purchases
$ 44,640
$ 29,760
$ 74,400
3rd Quarter purchases
$ 38,880
$ 25,920
$ 64,800
4th Quarter purchases
$ 31,680
$ 31,680
Total cash disbursements for material
$ 38,880
$ 68,640
$ 68,640
$ 57,600
$ 233,760
2.
Zan Corporation
Direct Labor Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Required production in units
5,000
8,000
7,000
6,000
26,000
Direct labor-hours per unit
0.2
0.2
0.2
0.2
0.2
Total direct labor-hours needed
1,000
1,600
1,400
1,200
5,200
Direct labor cost per hour
$11.50
$11.50
$11.50
$11.50
$11.50
Total direct labor cost
$11,500
$18,400
$16,100
$13,800
$59,800
Zan Corporation
Direct Material Budget
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Required production in units of finished goods
5,000
8,000
7,000
6,000
26,000
Units of raw materials needed per unit of finished goods
8
8
8
8
8
Units of raw materials needed to meet production
40,000
64,000
56,000
48,000
208,000
Add: Desired ending raw materials inventory
16,000
14,000
12,000
8,000
8,000
Total units of raw materials needed
56,000
78,000
68,000
56,000
216,000
Less: Beginning raw materials inventory
6,000
16,000
14,000
12,000
6,000
Units of raw materials to be purchased
50,000
62,000
54,000
44,000
210,000
Unit of cost of raw materials
$1.20
$1.20
$1.20
$1.20
$1.20
Cost of raw materials to be purchased
$ 60,000
$74,400
$64,800
$52,800
$ 252,000
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