Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Current Attempt in Progress Donna Clark is preparing the 2022 budget for one of Current Designs' rotomoulded kayaks. Extensive meetings with members of the

image text in transcribedimage text in transcribed

Current Attempt in Progress Donna Clark 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 2.600 kayaks Quarter 2 3.000 kayaks Quarter 3 2,400 kayaks Quarter 4 2.400 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 3.000 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 780 rotomoulded kayaks. Production of each kayak requires 50 kg 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 22,000 kg. 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 $1.20 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 1 employees are paid $18 per hour, and the type Il employees are paid $15 per hour. Selling and administrative expenses for this line are expected to be $45 per unit sold plus $7,500 per quarter. Manufacturing overhead is assigned at 140% of labour costs.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals of Advanced Accounting

Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik

6th edition

0-07-786223-6, 101259095592, 13: 978-0-07-7, 13978125909559, 978-0077862237

More Books

Students also viewed these Accounting questions