# The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:  1st Quarter2nd Quarter3rd Quarter4th QuarterUnits to be produced23,00026,00025,00024,000  In addition, 34,500 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 \$8,400. Each unit requires 6 grams of raw material that costs \$1.60 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 6,000 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 \$14.50 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.

Question
877 views

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 23,000 26,000 25,000 24,000

In addition, 34,500 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 \$8,400.

Each unit requires 6 grams of raw material that costs \$1.60 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 6,000 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 \$14.50 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.

check_circle

Step 1

1 and 2

Estimated grams of raw materials that need to be purchased and cost of raw materials to be purchased.

Step 2

3.

...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in