Exercise 8-16 Direct Materials and Direct Labor Budgets L08-4, L08-50 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 17,000 Units to be produced 16,000 14,000 15,000 In addition, 24,500 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 $6,600. Each unit requires 7 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 $15.50 per hour Required: Prepare the company's direct materials budgetfor the upcoming fiscal year. (Round "Unit c raw materials" answers to 2 decimal places.) Zan Corporation Direct Materials Budget 1st 2nd 3rd 4th Quarter Quarter Quarter Quarter Year 17000 14,000 15,000 Required production in units of finished goods 16,000 62,000 7 7 7 7 7 Units of raw materials needed per unit of finished goods 119,000 434,000 Units of raw materials needed to meet production 98,000 112,000 105,000 Add: Desired units of ending raw materials inventory 105,000 434,000 Total units of raw materials needed 98,000 119,000 112,000 Less: Units of beginning raw materials inventory 105,000 434,000 Units of raw materials to be purchased 98,000 119,000 112,000 Unit cost of raw materials Cost of raw materials to be purchased