Current Designs 9 (Part Level Submission) Diane Buswell is preparing the 2020 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 2020. Quarter 1 Quarter 2 Quarter 3 Quarter 4 2,500 kayaks 3,200 kayaks 2,150 kayaks 2,150 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 2021 are 1,100 units for the first quarter and 3,200 units for the second quarter. Ending inventory of finished goods at December 31, 2019, will be 750 rotomolded kayaks. Production of each kayak requires 54 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, 2019, is 20,000 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 $1.00 per pound, and the finishing kits cost $180 each. Production of a single kayak requires 2 hours of time by more experienced, type I employees and 3 hours of finishing time by type II employees. The type I employees are paid $16 per hour, and the type II employees are paid $13 per hour. Selling and administrative expenses for this line are expected to be $47 per unit sold plus $8,300 per quarter. Manufacturing overhead is assigned at 160% of labor costs. Quarter Q1 Q2 Q3 Q4 Total Units to be produced 2710 2885 2150 1835 1 Pounds of Polyethylene Powder Per Unit 54 54 54 54 10 Total Pounds Needed for Production 146340 155790 116100 99090 Add Desired Ending Inventory of Powder 38948 29025 24773 23355 Total Pounds of Powder Required 185288 184815 140873 122445 1 Less Beginning Inventory of Powder 20000 38948 29025 24773 x Pounds of Polyethylene Powder to be purchased v 165288 145868 111848 97673 Cost Per Pound 1 165288 145868 Cost of Polyethylene Powder to be purchased 111848 97673 Cost of Required Finishing Kits 487800 519300 387000 330300 x 653088 665168 Total Costs for Direct Materials 498848 427973 2245075