Accounting-Direct Materials and Direct Labor Budgets

Direct Materials and Direct Labor Budgets (8-13): The production department of Hareston Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:1st Quarter2nd Quarter3rd Quarter4th QuarterUnits to be produced7,0008,0006,0005,000In addition, the beginning raw materials inventory for the first quarter is budgeted to be 1,400 pounds and the beginning accounts payable for the first quarter is budgeted to be $2,940. Each unit requires 2 pounds of raw material that costs $1.40 per pound. Management desires to end each quarter with an inventory of raw materials equal to 10% of the following quarter’s production needs. The desired ending inventory for the fourth quarter is 1,500 pounds. Management plans to pay for 80% of raw material purchases in the quarter acquired and 20% in the following quarter. Each unit requires 0.60 direct labor-hours and direct labor-hour workers are paid $14.00 per hour.Prepare the company’s direct materials budget and schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.

Order your essay today and save 30% with the discount code: KIWI20