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Exercise 8-16 (Static) Direct Materials and Direct Labor Budgets [LO8-4, LO8-5] The
production department of Zan Corporatlon has submitted the following forecast of units to be
produced by quarter for the upcoming fiscal year: In addition, 6,000grams of raw materlals
inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st
Quarter is $2,880. Each unit requires 8 grams of raw material that costs $1.20 per gram.
Management desires to end each quarter with an inventory of taw materials equal to 25% of the
following quarter's production need5. The desired ending inventory for the 4 th Quarter is 8,000
grams. Management plans to pay for 60% of taw 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 $15 per hour. Required: 1. and 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 inaterials 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.

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Exercise 8-16 (Static) Direct Materials and Direct Labor Budgets [LO8.pdf

  • 1. Exercise 8-16 (Static) Direct Materials and Direct Labor Budgets [LO8-4, LO8-5] The production department of Zan Corporatlon has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: In addition, 6,000grams of raw materlals inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $2,880. Each unit requires 8 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of taw materials equal to 25% of the following quarter's production need5. The desired ending inventory for the 4 th Quarter is 8,000 grams. Management plans to pay for 60% of taw 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 $15 per hour. Required: 1. and 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 inaterials 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.