Prepare the Direct materials Budget, Direct Labor Budget, Manufacturing overhead budget, and selling and administrative budget.
Below is the Direct Materials Budget.
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 1,900 Kayaks Quarter 2 2,200 kayaks Quarter 3 1,750 Kayaks Quarter 4 1,750 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 2,200 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 570 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 produ ion in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 19,000 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 $1.30 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 $42 per unit sold plus $6,800 per quarter. Manufacturing overhead is assigned at 140% of labor costs. 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.) Direct M For the Q1 Units to be Produced 1900 Direct Labor Time Per Unit 60 [ [ [ Total Required Direct Labor Hours 114000 Add : Desired Ending Inventory of Powder 26400 Total Pounds of Powder Required 140400 [ Less J: Beginning Inventory of Powder 19000 i Total Pounds Needed for Production Cost of Required Finishing Kits $ Total Costs for Direct Materials $ [ $ [ $ [ [ $ [ Cost Per Pound Cost of Polyethylene Powder to be purchased ta arter a ers to Beginning Inventory of Powder Cost of Polyethylene Powder to be purchased Cost of Required Finishing Kits Cost Per Pound Desired Ending Inventory of Powder Pounds of Polyethylene Powder Per Unit Pounds of Polyethylene Powder to be purchased Total Costs for Direct Materials Total Pounds Needed for Production Total Pounds of Powder Required Units to be Produced Direct Labor Cost Per Hour Direct Labor Time Per Unit Total Direct Labor Cost Total Required Direct Labor Hours Add: Desired Ending Inventory of Powder Total Pounds of Powder Required e Less: Beginning Inventory of Powder Total Pounds Needed for Production Cost of Required Finishing Kits Total Costs for Direct Materials Cost Per Pound Cost of Polyethylene Powder to be purchased 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-Polyethylene Powder For the Year Ending December 31, 2022 Quarter Q1 Q2 Q3 1900 2200 1750 60 60 60 114000 132000 105000 26400 21000 21000 140400 153000 126000 19000 i ta $ $ $ $ $ $ $ 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.) Powder 22 larter Q3 Q4 Total 1750 1750 7600 60 60 60 105000 105000 456000 21000 91200 26400 126000 196200 482400 $ $ $ $ $ $ $ TA
