The production department of Priston Company has submitted the following forecast of units to be produced by

Question:

The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year.

In addition, the beginning raw materials inventory for the 1st Quarter is budgeted to be 3,600 pounds and the beginning accounts payable for the 1st Quarter is budgeted to be $11,775.
Each unit requires three pounds of raw material that costs $2.50 per pound. Management desires to end each quarter with a raw materials inventory equal to 20% of the following quarter€™s production needs. The desired ending inventory for the 4th 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 materials for the upcoming fiscal year.
2. Prepare the company€™s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of unitsproduced.

Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...