$\frac{3\mathrm{.}5}{10}$

Lisa Anderson is preparing the $2022$ budget for one of Current Designs' rotomoulded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for $2022.$

Quarter $1,2,100$ kayaks

Quarter $2,2,600$ kayaks

Quarter $3,1,850$ kayaks

Quarter $4,1,850$ kayaks

Current Designs' policy is to have finished goods ending inventory in a quarter equal to $30\%$ of the next quarter's anticipated sales. Preliminary sales projections for $2023$ are $1,100$ units for the first quarter and $2,600$ units for the second quarter. Ending inventory of finished goods at December $31,2021,$ will be $630$ rotomoulded kayaks.

Production of each kayak requires $48kg$ 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 $21,600kg.$ 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 $$1\mathrm{.}20$ per kilogram, and the finishing kits cost $$140$ each. Production of a single kayak requires $5$ hours of time by more experienced, type I employees and $6$ hours of finishing time by type II employees. The type I employees are paid $$19$ per hour, and the type II employees are paid $$16$ per hour.

Selling and administrative expenses for this line are expected to be $$46$ per unit sold plus $$8,700$ per quarter. Manufacturing overhead is assigned at $120\%$ of labour costs.

$($a$1)$

Correct Answer