ERCISE 7-14 Direct Materials and Direct Labor Budgets (L04, LO5) The production department of Priston Company has submitted the following forecast of units to be pro- duced by quarter for the upcoming fiscal year. 3rd Quarter 4th Quarter Ist Quarter Units to be produced ...... 6.000 2nd Quarter 7,000 8,000 5.000 Chapter 7 In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,600 pounds and the beginning accounts payable for the first quarter is budgeted to be $11.775. Each unit requires 3 pounds of raw material that costs $2.50 per pound. Management desires to end each quarter with an inventory of raw materials equal to 20% of the following quarter's production need The desired ending inventory for the fourth quarter is 3.700 pounds. Management plans to pay for 70% of raw material purchases in the quarter acquired and 30% in the following quarter. Each unit requires 0.50 direct labor-hours and direct labor-hour workers are paid $12 per hour. Required: 1. Prepare the company's direct materials budget and schedule of expected cash disbursements for ma. terials for the upcoming fiscal year. 2. Prepare the company's direct labor budget for the upcoming fiscal year, assuming that the direct la bor workforce is adjusted each quarter to match the number of hours required to produce the fore, casted number of units produced