Managerial Accounting: P9-15 The production department of Taylor Company has

Managerial Accounting 
PROBLEM 9–15 Direct Materials Purchases and Direct Labour Budgets 
The production department of Taylor Company has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: 
First Quarter Second Quarter Third Quarter Fourth Quarter 
Units to be produced 6,000 7,000 8,000 5,000 

In addition, the beginning raw materials inventory for the first quarter is budgeted to be 3,600 kilograms and the beginning accounts payable for the first quarter is budgeted to be $11,775. 
Each unit requires three kilograms of raw material that costs $2.50 per kilogram. Management wants 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 fourth quarter is 3,700 kilograms. 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 labour-hours, and direct labour-hour workers are paid $12 per hour. 

1. Prepare the company’s direct materials purchases budget and schedule of expected cash disbursements for materials for the upcoming fiscal year. 
2. Prepare the company’s direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.
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