CUSTOM DESIGNS Direct Materials Budget For the Year Ending December 31, 2020 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Units to be produced Pounds of polyethylene powder per unit Total pounds need for production Add: Desired ending powder inventory Total pounds of powder Less:Beginning inventory of powder Pounds of polyethylene powder to be 18225 64800 41445 49140 213610 purchased 1 Cost per pound $ 1.50 $ 1.50 $ 1.50 $ 1.50 $ 1.50 2 Cost of powder to be purchased -3 Finishing kits required per unit 14 Cost of finishing kits per unit 55 Cost of required finishing kits 187,000 229,500 127,500 139,400 683,400 36 Total costs for direct materials $ 274,338 $ 326,700 $ 189,668 $ 213.110 $ 1.003,815 57 2/18/10/66/42/50/6/4/4@0:0 Upda CD9 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 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2021 are 1.100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2019, will be 200 rotomolded kayaks. Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, sout, hardware, etc.). Company policy is that the ending inventory of polyethylone powder should be 25% of the amount needed for production in the next quarter. Assume that the onding Inventory of polyethylene powder on December 31, 2019, is 19,400 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 $1.50 per pound, and the finishing kits cost $170 each. Production of a single kayak requires 2 hours of time by more experienced, typo I employees and 3 hours of finishing time by type ll employees. The type I employees are paid $15 per hour, and the type ll employees are paid $12 per hour. Selling and administrative expenses for this line are expected to be $45 per unit sold plus $7,500 por quarter. Manufacturing overhead is assigned at 150% of labor costs. Instructions Prepare the production budget, direct materials budget, direct labor budget, manufacturing overhead budget, and selling and administrativo budget for this product line by quarter and in total for 2020 Waterways > >
