CURRENT DESIGNS

Direct Materials Budget$-$Polyethylene Powder

Quarter

Q$1$

Q$2$

Q$3$

Q$4$

$v$

Quarter 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 $1$

$1,300$ kayaks

Quarter $2$

$2,100$ kayaks

Quarter $3$

$900$ kayaks

Quarter $4$

$900$ 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 $2,100$ units for the second quarter. Ending inventory of finished goods at December $31,2021,$ will be $390$ rotomolded kayaks.

Production of each kayak requires $60$ pounds of polyethylene powder and a finishing kit $($rope$,$ seat, hardware, etc.$).$ Company policy is that the ending inventory of polyethylene powder should be $20\%$ of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December $31,2021,$ is $20,800$ 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 $$1\mathrm{.}20$ per pound, and the finishing kits cost $$160$ 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 Il employees. The type I employees are paid $$19$ per hour, and the type Il employees are paid $$16$ per hour.

Selling and administrative expenses for this line are expected to be $$46$ per unit sold plus $$8,900$ 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 $2022.$