Quarter 1-4
+ Chapter 9 Question 42 of 50 0.28/1 Current Attempt in Progress 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 2,000 kayaks Quarter 2 2,400 kayaks Quarter 3 1,800 kayaks Quarter 4 1,800 kayaks 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 2021 are 1.100 units for the first quarter and 2,400 units for the second quarter. Ending inventory of finished goods at December 31, 2019, will be 300 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, 2019, 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 $ 1.50 per pound, and the finishing kits cost $ 160 each. Production of as kayak requires 4 hours of time by more experienced, type l employees and 5 hours of finishing time by type II employees. The type 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 $ 50 per unit sold plus $ 6,100 per quarter, Manufacturing overhead is assigned at 150% of labor costs. (a) - Your answer is partially correct. Prepare the direct materials budget for this product line by quarter and in total for 2020. (Round cost per pound to 2 decimal places, e.g. 1.25 and other answers to O decimal places, e.g. 125.) Direct M For the Q1 Units to be Produced 2060 Pounds of Polyethylene Powder Per Unit 58 Total Pounds Needed for Production 119480 Add Desired Ending Inventory of Powder Total Pounds of Powder Required Less : Beginning Inventory of Powder Pounds of Polyethylene Powder to be purchased Cost Per Pound Cost of Polyethylene Powder to be purchased Cost of Required Finishing Kits . e Textbook and Media
