Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
image text in transcribed
image text in transcribed
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. Current Designs' policy is to have finished goods ending inventory in a quarter equal to 15% of the next quarter's anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 2,700 units for the second quarter. Ending inventory of finished goods at December 31,2021 , will be 315 rotomolded kayaks. Production of each kayak requires 58 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 19,600 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 $150 each. Production of a single kayak requires 3 hours of time by more experienced, type I employees and 4 hours of finishing time by type II employees. The type I employees are paid $19 per hour, and the type II employees are paid $16 per hour. Selling and administrative expenses for this line are expected to be $46 per unit sold plus $6,000 per quarter. Manufacturing overhead is assigned at 160% of labor costs. (b) On the next page, prepare the direct materials budget for this product line by quarter and in total for 2022. (Round cost per pound to 2 decimal places, e.g. 1.25 and other answers to 0 decimal places, e.g. 125.) Current Designs Direct Materials Budget (c) Prepare the direct labor budget for this product line by quarter and in total for 2022. Current Designs Direct Labor Budget (date) (d) Prepare the manufacturing overhead budget for this product line by quarter and in total for 2022. Current Designs (date) Manufacturing Overhead Budget (e) Prepare the selling and administrative expenses budget for this product line by quarter and in total for 2022. Current Designs Selling and Administrative Expense Budget (date)

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_2

Step: 3

blur-text-image_3

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

Auditing Today

Authors: Emile Woolf

6th Edition

0135894662, 978-0135894668

More Books

Students also viewed these Accounting questions