The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 8,000 4th Quarter Units to be produced 6,000 9,000 7,000 In addition, 6,000 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 $5,000. Each unit requires 4 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 $12.50 per hour. 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.
The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 8,000 4th Quarter Units to be produced 6,000 9,000 7,000 In addition, 6,000 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 $5,000. Each unit requires 4 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 $12.50 per hour. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The production department of Zan Corporation has submitted the following forecast of units to be produced by
quarter for the upcoming fiscal year:
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Units to be produced
6,000
9,000
8,000
7,000
In addition, 6,000 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 $5,000.
Each unit requires 4 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%
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 $12.50 per hour.
the following quarter's production needs. The desired ending
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
Req 3
Req 4
Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each
and for the year as a whole.
1st
2nd
3rd
4th
Quarter
Quarter
Quarter
Quarter
Year
Estimated grams of raw material to be purchased
Cost of raw materials to be purchased
Req 1 and 2
Req 3
>
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