Question
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
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 | 1,200 | kayaks | |
| Quarter 2 | 1,500 | kayaks | |
| Quarter 3 | 1,050 | kayaks | |
| Quarter 4 | 1,050 | kayaks |
Current Designs policy is to have finished goods ending inventory in a quarter equal to 15% of the next quarters anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 180 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 21,400 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 $1.00 per pound, and the finishing kits cost $170 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 I employees are paid $15 per hour, and the type II employees are paid $12 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 160% of labor costs.
(a)
Prepare the production budget for this product line by quarter and in total for 2022.
| CURRENT DESIGNS Production Budget choose the accounting period December 31, 2022For the Month Ending December 31, 2022For the Year Ending December 31, 2022 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Total | |||||||
| select an opening production budget item Expected Unit SalesBeginning Direct MaterialsDesired Ending Direct MaterialsTotal Materials RequiredDirect Materials PurchasesTotal Required UnitsRequired Production UnitsDesired Ending Finished Goods UnitDirect Materials Per UnitBeginning Finished Goods Unit | enter a number of units | enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select between addition and deduction AddLess: select a production budget item Required Production UnitsTotal Materials RequiredBeginning Direct MaterialsDesired Ending Finished Goods UnitTotal Required UnitsDesired Ending Direct MaterialsDirect Materials PurchasesBeginning Finished Goods UnitExpected Unit SalesDirect Materials Per Unit | enter a number of units | enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select a summarizing line for the first part Desired Ending Finished Goods UnitBeginning Direct MaterialsExpected Unit SalesTotal Required UnitsTotal Materials RequiredBeginning Finished Goods UnitDesired Ending Direct MaterialsRequired Production UnitsDirect Materials PurchasesDirect Materials Per Unit | enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | enter a total number of units for the first part | ||||||
| select between addition and deduction AddLess: select a production budget item Direct Materials Per UnitBeginning Finished Goods UnitDesired Ending Direct MaterialsBeginning Direct MaterialsTotal Required UnitsDesired Ending Finished Goods UnitDirect Materials PurchasesRequired Production UnitsTotal Materials RequiredExpected Unit Sales | enter a number of units | enter a number of units | enter a number of units | enter a number of units | enter a number of units | ||||||
| select a closing production budget item Desired Ending Direct MaterialsDirect Materials Per UnitBeginning Direct MaterialsRequired Production UnitsDirect Materials PurchasesExpected Unit SalesDesired Ending Finished Goods UnitTotal Required UnitsTotal Materials RequiredBeginning Finished Goods Unit | enter a total number of units | enter a total number of units | enter a total number of units | enter a total number of units | enter a total number of units | ||||||
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