Bill Johnson, sales manager, and Diane Bustell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.

Kevlar ${?}^{}$

Resin and supplies

Finishing kit $($seat$,$ rudder, ropes, etc.$)$

Direct Labor

Selling and administrative expenses$-$variable

Selling and administrative expenses$-$fixed $$156,000$ per year

Manufacturing overhead$-$fixed

$$300$ per kayak

$$130$ per kayak

$$170$ per kayak

$$420$ perkayak

$$420$ per kayak

$$240,000$ peryear