The production department of Priston Company has submitted thefollowing forecast of units to be produced by quarter for theupcoming fiscal year.
1stQuarter 2ndQuarter 3rdQuarter 4thQuarter Units to be produced 10,000 11,000 12,000 9,000
In addition, the beginning raw materials inventory for the 1stQuarter is budgeted to be 5,000 pounds and the beginning accountspayable for the 1st Quarter is budgeted to be $19,000.
Each unit requires two pounds ofraw material that costs $4.00 per pound. Management desires to endeach quarter with a raw materials inventory equal to 25% of thefollowing quarterâs production needs. The desired ending inventoryfor the 4th Quarter is 6,750 pounds. Management plans to pay for60% of raw material purchases in the quarter acquired and 40% inthe following quarter. Each unit requires 0.75 direct labor-hoursand direct labor-hour workers are paid $13 per hour.
Required: 1a. Prepare the companyâs direct materials budget for the upcomingfiscal year. (Input all amounts as positive values. Do notround intermediate calculations.)
Priston Company
Direct Materials Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Production needs - pounds (Click to select)DeductAdd: (Click to select)BeginninginventoryEnding inventory Total needs - pounds (Click to select)AddDeduct: (Click to select)EndinginventoryBeginning inventory Rawmaterials to be purchased - pounds Costof raw materials to be purchased $ $ $ $ $
1b. Prepare a schedule of expected cash disbursements for purchasesof materials for the upcoming fiscal year. (Leave no cellsblank - be certain to enter "0" wherever required. Do not roundintermediate calculations.)
Priston Company
Schedule of Expected Cash Disbursements for Materials 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Accounts payable, beginning balance $ $ $ $ $ 1stQuarter purchases 2ndQuarter purchases 3rdQuarter purchases 4thQuarter purchases Total cash disbursements for materials $ $ $ $ $
2. Complete the company's direct labor budget for the upcomingfiscal year, assuming that the direct labor workforce is adjustedeach quarter to match the number of hours required to produce theforecasted number of units produced.
Priston Company
Direct Labor Budget 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Total direct labor-hours needed Total direct labor cost $ $ $ $ $
The production department of Priston Company has submitted thefollowing forecast of units to be produced by quarter for theupcoming fiscal year.
| 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter | |
| Units to be produced | 10,000 | 11,000 | 12,000 | 9,000 |
In addition, the beginning raw materials inventory for the 1stQuarter is budgeted to be 5,000 pounds and the beginning accountspayable for the 1st Quarter is budgeted to be $19,000. |
Each unit requires two pounds ofraw material that costs $4.00 per pound. Management desires to endeach quarter with a raw materials inventory equal to 25% of thefollowing quarterâs production needs. The desired ending inventoryfor the 4th Quarter is 6,750 pounds. Management plans to pay for60% of raw material purchases in the quarter acquired and 40% inthe following quarter. Each unit requires 0.75 direct labor-hoursand direct labor-hour workers are paid $13 per hour. |
| Required: | |
| 1a. | Prepare the companyâs direct materials budget for the upcomingfiscal year. (Input all amounts as positive values. Do notround intermediate calculations.) |
| Priston Company Direct Materials Budget | |||||
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |
| Production needs - pounds | |||||
| (Click to select)DeductAdd: (Click to select)BeginninginventoryEnding inventory | |||||
| Total needs - pounds | |||||
| (Click to select)AddDeduct: (Click to select)EndinginventoryBeginning inventory | |||||
| Rawmaterials to be purchased - pounds | |||||
| Costof raw materials to be purchased | $ | $ | $ | $ | $ |
| 1b. | Prepare a schedule of expected cash disbursements for purchasesof materials for the upcoming fiscal year. (Leave no cellsblank - be certain to enter "0" wherever required. Do not roundintermediate calculations.) |
| Priston Company Schedule of Expected Cash Disbursements for Materials | |||||
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |
| Accounts payable, beginning balance | $ | $ | $ | $ | $ |
| 1stQuarter purchases | |||||
| 2ndQuarter purchases | |||||
| 3rdQuarter purchases | |||||
| 4thQuarter purchases | |||||
| Total cash disbursements for materials | $ | $ | $ | $ | $ |
| 2. | Complete the company's direct labor budget for the upcomingfiscal year, assuming that the direct labor workforce is adjustedeach quarter to match the number of hours required to produce theforecasted number of units produced. |
| Priston Company Direct Labor Budget | |||||
| 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | Year | |
| Total direct labor-hours needed | |||||
| Total direct labor cost | $ | $ | $ | $ | $ |
Related questions
E8-11 - Please explain how you arrived at your answers.Thank you!
| Exercise 8-11 Direct Materials and Direct Labor Budgets [LO4,LO5]
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The production department of Zan Corporation has submitted thefollowing forecast of units to be produced by quarter for theupcoming fiscal year: |
| 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter | |
| Units to beproduced | 15,000 | 18,000 | 17,000 | 16,000 |
In addition, 30,000 grams of raw materials inventory is on handat the start of the 1st Quarter and the beginning accounts payablefor the 1st Quarter is $6,800. |
Each unit requires 8 grams of rawmaterial that costs $1.60 per gram. Management desires to end eachquarter with an inventory of raw materials equal to 25% of thefollowing quarterâs production needs. The desired ending inventoryfor the 4th Quarter is 6,000 grams. Management plans to pay for 60%of raw material purchases in the quarter acquired and 40% in thefollowing quarter. Each unit requires 0.20 direct labor-hours anddirect laborers are paid $11.50 per hour. |
| Required: | |
| 1-a. | Prepare the companyâs direct materials budget for the upcomingfiscal year. (Round "Unit cost of raw materials" answers to2 decimal places.) |
| 1-b. | Prepare a schedule of expected cash disbursements for purchasesof materials for the upcoming fiscal year. |
| 2. | Prepare the companyâs direct labor budget for the upcomingfiscal year, assuming that the direct labor workforce is adjustedeach quarter to match the number of hours required to produce theforecasted number of units produced. (Round "Directlabor-hours per unit" and "Direct labor cost per hour" answers to 2decimal places.) |
The production department of Zan Corporation has submitted thefollowing forecast of units to be produced by quarter for theupcoming fiscal year: |
| 1stQuarter | 2ndQuarter | 3rdQuarter | 4thQuarter | |
| Units to beproduced | 18,000 | 21,000 | 20,000 | 19,000 |
In addition, 27,000 grams of raw materials inventory is on handat the start of the 1st Quarter and the beginning accounts payablefor the 1st Quarter is $7,400. |
Each unit requires 6 grams of rawmaterial that costs $1.40 per gram. Management desires to end eachquarter with an inventory of raw materials equal to 25% of thefollowing quarterâs production needs. The desired ending inventoryfor the 4th Quarter is 7,000 grams. Management plans to pay for 60%of raw material purchases in the quarter acquired and 40% in thefollowing quarter. Each unit requires 0.40 direct labor-hours anddirect laborers are paid $14.50 per hour. |
| Required: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1-a. | Prepare the companyâs direct materials budget for the upcomingfiscal year. (Round "Unit cost of raw materials" answers to2 decimal places.)
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
