The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced 1st Quarter 25,000 2nd Quarter 28,000 3rd Quarter 27,000 4th Quarter 26,000 In addition, 50,000 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 $8,800. 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: 1.82. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole.
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: Units to be produced 1st Quarter 25,000 2nd Quarter 28,000 3rd Quarter 27,000 4th Quarter 26,000 In addition, 50,000 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 $8,800. 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: 1.82. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole. 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole. 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Chec
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the
upcoming fiscal year:
3rd Quarter
27,000
4th Quarter
26,000
2nd Quarter
Units to be produced
1st Quarter
25,000
28,000
In addition, 50,000 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 $8.800.
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 pald $11.50 per hour.
nces
Required:
1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter
and for the year as a whole.
3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.
4. Calculate the estimated direct labor cost for each quarter and for the year as a whole..
Complete this question by entering your answers in the tabs below.
Req 1 and 2
Reg 3
Req 4
Calculate the estimated direct labor cost for each quarter and for the year as a whole. (Round "Direct labor-hours per unit"
and "Direct labor cost per hour" answers to 2 decimal places.)
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Total direct labor cost
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