Question

Current Designs CD9 Diane Buswell is preparing the 2020 budget for one of Current Designs' rotomolded Extensive meetings with members of the sales department and executive team have resulted in the lowing unit sales projections for 2020. Quarter 1 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2021 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2019, will be 200 rotomolded kayaks. Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seal. hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2019, is 14,850 pounds. The finishing kits can be assembled as they are needed. As a result, Current Designs does not maintain a significant inventory of the finishing kits. The polyethylene powder used in these kayaks costs $1.50 per pound, and the finishing kits cos $170 each. Production of a single kayak requires 2 hours of time by more experienced, type I employce and 3 hours of finishing time by type II employees. The type I employees are paid $15 per hour, and type II employees are paid $12 per hour. Selling and administrative expenses for this line are expected to be $45 per unit sold plus sur quarter. Manufacturing overhead is assigned at 150% of labor costs. Instructions Prepare the production budget, direct materials budget, direct labor budget, manufactur budget, and selling and administrative budget for this product line by quarter and in total - manufacturing overhead

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Production Budget avastast cau. 2 :looo 1500 con 3 I 450 an. 4 | 750 Expected whit sceles Expected uait sales (+desired endelig feished goods mits tofeluquvoodenit 16 Beguing feished coods units Regewied pecclecticon unit 300 / 150 1300 1650 150 a oo 820 1970 900 L 300 L 150 150 1100 1350 750 090

Solling and Aclmiwietacehiwe Budget 1000 1500 750 750 45000 67500 33750 33750 Expected entsalo vouriable selling and admi. Cost @ $45 fixed selling and admin. Costs total selleg and admi. Costs 7500 7500 7500 7500 52500 75000 41850 uloso

Deuect labour Bed get unit to be produced 1100 1350 750 ago Neem co hour of morar skollect labawl unit xa xa x2 X2 total number of howis amoro skilled labeur 2200 2700 1500 1640 Hourly rate for more skilled labour XIS IS XIS XIS to tel Cast of more is i skilled labour 33000 40.500 29500 94600 unit to be produced 1100 1350 750 020 Num of howy a noro skilled labo X3 X3 X3 X 3 toted number of howromos skilab. 3300 4050 2250 6460 Howrly sale for more skilled lab. X 19 X 12 X 12 X12 of total cost of loss 39600 40 600 27000 29520 I Skilled labour total cost for direct I labour 7260009100 49500 54120 Manufactering overhead . total cost of direct labour 19600 89100 49500 sugo manes. averhead rate -peordeiect labaurdal x 1501 x 1501 x 1501 x 1501 manufadening overhead Cost 11009001133650174250 lalloo