The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,440 kayaks during 2022. Each kayak will require 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.10 per pound, and the finishing kits cost $250 each. Each kayak will use two kinds of labor2 hours of type I labor from people who run the oven and trim the plastic, and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $14 per hour, and the type II are paid $11 per hour. Manufacturing overhead is budgeted at $390,400 for 2022, broken down as follows.

Variable costs
Indirect materials		$41,280
Manufacturing supplies		44,720
Maintenance and utilities		86,000
		172,000
Fixed costs
Supervision		96,000
Insurance		14,400
Depreciation		108,000
		218,400
Total		$390,400

During the first quarter, ended March 31, 2022, 910 units were actually produced with the following costs.

Polyethylene powder		$56,024
Finishing kits		227,890
Type I labor		25,480
Type II labor		31,250
Indirect materials		10,920
Manufacturing supplies		11,867
Maintenance and utilities		25,210
Supervision		22,000
Insurance		3,600
Depreciation		27,000
Total		$441,241

a) Prepare the annual manufacturing budget for 2022, assuming that 3,440 kayaks will be produced. (List variable costs before fixed costs.) b) Prepare the flexible budget for manufacturing for the quarter ended March 31, 2022. Assume activity levels of 760, 860, and 910 units. (List variable costs before fixed costs.)

c) Assuming the rotomolded line is treated as a cost center, prepare a flexible budget report for manufacturing for the quarter ended March 31, 2022, when 910 units were produced. (List variable costs before fixed costs.)