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EXERCISE 8-16 Direct Materials and Direct Labor Budgets LOB 40. LOB-5@ 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 5,000 8,000 7,000 6,000 In addition, 6,000 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 $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 raw materials equal to 25% of the following quarter's production needs. The desired ending inventory for the 4th Quarter is 8.000 grama. 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 laborera are paid $11.50 per hour. Required: 1. Calculate the estimated grams of raw material that need to be purchased each quarter and for the year as a whole (Hint: Refer to Schedule 3 for guidance) 2. Calculate the cost of raw material purchases for each quarter and for the year as a whole (Hint: Refer to Schedule 3 for guidance) 3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole (Hint: Refer to Schedule 3 @ for guidance). 4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced (Hint: Refer to Schedule 4 for guidance)