The production department of Zan Corporation has submitted thefollowing forecast of units to be produced by quarter for theupcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4thQuarter Units to be produced 10,000 13,000 12,000 11,000 Inaddition, 20,000 grams of raw materials inventory is on hand at thestart of the 1st Quarter and the beginning accounts payable for the1st Quarter is $5,800. Each unit requires 8 grams of raw materialthat costs $1.40 per gram. Management desires to end each quarterwith an inventory of raw materials equal to 25% of the followingquarter’s production needs. The desired ending inventory for the4th Quarter is 7,000 grams. Management plans to pay for 60% of rawmaterial purchases in the quarter acquired and 40% in the followingquarter. Each unit requires 0.40 direct labor-hours and directlaborers are paid $11.50 per hour. Required: 1.&2. Calculatethe estimated grams of raw material that need to be purchased andthe cost of raw material purchases for each quarter and for theyear as a whole. 3. Calculate the expected cash disbursements forpurchases of materials for each quarter and for the year as awhole. 4. Calculate the estimated direct labor cost for eachquarter and for the year as a whole. Assume that the direct laborworkforce is adjusted each quarter to match the number of hoursrequired to produce the estimated number of units produced.
