90.2K

Verified Solution

Link Copied!

Diane Buswell is preparing the $2022$ budget for one of Current Designs' rotomolded kayaks. Extensive meetings with members of the

sales department and executive team have resulted in the following unit sales projections for $2022.$

Quarter $12800$ kayaks

Quarter $23300$ kayaks

Quarter $32550$ kayaks

Quarter $42550$ kayaks

Current Designs' policy is to have finished goods ending inventory in a quarter equal to $25\%$ of the next quarter's anticipated sales.

Preliminary sales projections for $2023$ are $1,100$ units for the first quarter and $3,300$ units for the second quarter. Ending inventory of

finished goods at December $31,2021,$ will be $700$ rotomolded kayaks.

Production of each kayak requires $44$ pounds of polyethylene powder and a finishing kit $($rope$,$ seat, 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 $31,2021,$ is $20,400$ 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 $$1\mathrm{.}20$ per pound, and the finishing kits cost $$150$ each. Production of a single

kayak requires $4$ hours of time by more experienced, type I employees and $5$ hours of finishing time by type II employees. The type I

employees are paid $$17$ per hour, and the type II employees are paid $$14$ per hour.

Selling and administrative expenses for this line are expected to be $$42$ per unit sold plus $$7,900$ per quarter. Manufacturing overhead

is assigned at $150\%$ of labor costs.

A$)$ Prepare the production budget for this product line by quarter and in total for $2022.$

B$)$ Prepare the direct materials budget for this product line by quarter and in total for $2022.($Round cost per kg to $2$ decimal places, e$.$g$,12\mathrm{.}25$ and other answers to $0$ decimal places, e$.$g$.125.)$

C$)$ Prepare the direct materials budget for this product line by quarter and in total for $2022.($Round cost per kg to $2$ decimal places, e$.$g$,12\mathrm{.}25$ and other answers to $0$ decimal places, e$.$g$.125.)$

D$)$ Prepare the manufacturing overhead budget for this product line by quarter and in total for $2022.$

E$)$ Prepare the selling and administrative expenses budget for this product line by quarter and in total for $2022.$

Answer & Explanation Solved by verified expert

See Answer