Question

CURRENT DESIGNS

Diane Buswell is preparing the 2019 budget for one of Current Designs' kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2019.

Quarter 1	1,000 kayaks
Quarter 2	1,500 kayaks
Quarter 3	750 kayaks
Quarter 4	750 kayaks

Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2020 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2018, will be 200 kayaks.

Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2018, is 19,400 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 $1.50 per pound, and the finishing kits cost $170 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 $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 150% of labor costs.

Instructions:Prepare the following:

1. direct materials budget
2. direct labor budget
3. manufacturing overhead budget
4. selling and administrative budget for this product line by quarter and in total for 2019.

Answer 1

PRODUCTION BUDGET
			Q1	Q2	Q3	Q4	Year	Q1	Q2
Budgeted Sales Units		11,000	21,500	3,750	4,750	41,000	1,100	1,500
Add: Desired Ending Finished inventory	4,300	750	950	220	220	300
Total Needs		15,300	22,250	4,700	4,970	41,220	1,400
Less: Beginning Finished Inventory	200	4,300	750	950	200	220
Required Production in units	15,100	17,950	3,950	4,020	41,020	1,180
RAW MATERIAL PURCHASE BUDGET
			Q1	Q2	Q3	Q4	Year	Q1
Budgeted Production units	15,100	17,950	3,950	4,020	41,020	1,180
RM required per unit		54	54	54	54	54	54
Total RM requiremnt		8,15,400	9,69,300	2,13,300	2,17,080	22,15,080	63,720
Add: Desired Ending Inventory	2,42,325	53,325	54,270	15,930	15,930
Total needs		10,57,725	10,22,625	2,67,570	2,33,010	22,31,010
Less: Beginning Inventory	19,400	2,42,325	53,325	54,270	19,400
Purchase Units		10,38,325	7,80,300	2,14,245	1,78,740	22,11,610
Cost price per unit		1.50	1.50	1.50	1.50	1.50
Cost of Polythene Powder	15,57,488	11,70,450	3,21,368	2,68,110	33,17,415
Cost of Finishing Kits		2567000	3051500	671500	683400	6973400
(Units produced @170)
Total Direct material cost	41,24,488	42,21,950	9,92,868	9,51,510	########
Direct Labor Budget
			Q1	Q2	Q3	Q4	Year
Budgeted Production units	15,100	17,950	3,950	4,020	41,020
DLH of Skilled labor required per unit	2	2	2	2	2
TOTAL Skilled DLH required	30200	35900	7900	8040	82040
Multiply: Rate per DLH	15	15	15	15	15
Total Labor cost of Skilled	453000	538500	118500	120600	1230600
LessSkilled Labor
Budgeted Production units	15,100	17,950	3,950	4,020	41,020
DLH of Less Skilled labor required per unit	3	3	3	3	3
TOTAL Less Skilled DLH required	45300	53850	11850	12060	123060
Multiply: Rate per DLH	12	12	12	12	12
Total Labor cost of Less Skilled	543600	646200	142200	144720	1476720
Total Direct labor cost			996600	1184700	260700	265320	2707320
Manufacturing OH Budget
			Q1	Q2	Q3	Q4	Year
Direct labor cost		996600	1184700	260700	265320	2707320
Multiply: OH rate		150%	150%	150%	150%	150%
Budgeted Manufacturing overheads	1494900	1777050	391050	397 ekkarill92 Next > < Previous Related Solutions Diane Buswell is preparing the 2019 budget for one of Current Designs' kayaks. Extensive meetings with... Diane Buswell is preparing the 2019 budget for one of Current Designs' kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2019. Quarter 1 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2020 are 1,100 units... Diane Buswel! is preparing the 201/ budget for one of Current Designs rotomolded kayaks Extensive meetings... Diane Buswel! is preparing the 201/ 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 2017. Quarte 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks Current Designs policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarters anticipated sales. Preliminary sales projections for 2018 are 1,100 units... Current Designs manufactures two different types of kayaks, rotomolded kayaks and composite kayaks. The following information... Current Designs manufactures two different types of kayaks, rotomolded kayaks and composite kayaks. The following information is available for each product line. Rotomolded Composite Sales price/unit $800 $2,000 Variable costs/unit $480 $1,340 The company’s fixed costs are $706,160. An analysis of the sales mix identifies that rotomolded kayaks make up 80% of the total units sold. Correct answer iconYour answer is correct. Determine the weighted-average unit contribution margin for Current Designs. Weighted-average unit contribution margin $ eTextbook and Media   ... Current Designs manufactures two different types of kayaks, rotomoulded kayaks and composite kayaks. The following information... Current Designs manufactures two different types of kayaks, rotomoulded kayaks and composite kayaks. The following information is available for each product line. Rotomoulded Composite Sales price/unit $1,120 $2,360 Variable costs/unit $670 $1,580 The company’s fixed costs are $968,000. An analysis of the sales mix identifies that rotomoulded kayaks make up 80% of the total units sold. Determine the weighted-average unit contribution margin for Current Designs. Weighted-average unit contribution margin $ Determine the break-even point in units for Current Designs and... Current Designs Problem 5 Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are... Current Designs Problem 5 Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak. Kevlar® $230 per kayak Resin and supplies $190 per kayak Finishing kit (seat, rudder, ropes, etc.) $160 per kayak Labor $450 per kayak Selling and administrative expenses—variable $400 per kayak Selling and administrative... As you learned in the previous chapters, Current Designs has two main product lines—composite kayaks, which... As you learned in the previous chapters, Current Designs has two main product lines—composite kayaks, which are handmade and very labor-intensive, and rotomolded kayaks, which require less labor but employ more expensive equipment. Current Designs’ controller, Diane Buswell, is now evaluating several different methods of assigning overhead to these products. It is important to ensure that costs are appropriately assigned to the company’s products. At the same time, the system that is used must not be so complex that its... Petesy Corporation is preparing its Master Budget for 2019. Budget information is as follows:                           &nb Petesy Corporation is preparing its Master Budget for 2019. Budget information is as follows:                                                         Sales                      Production Cost                                Operating Expenses 2019               1st Quarter          P280,000              P192,000                              P64,000                         2nd Quarter         320,000               200,000                                  68,000                         3rd Quarter          360,000               224,000                                  72,000                         4th Quarter          352,000               200,000                                  76,000 2020               1st Quarter          320,000               224,000                                  72,000 The budgeted Finished Goods Inventories are:         2018       March 31             P56,000                         June 30                 52,000                         September 30      60,000                         December 31     48,000 The company uses... HammerTime is preparing their 2019 budget. They want to look at static budgets and flexible budgets... HammerTime is preparing their 2019 budget. They want to look at static budgets and flexible budgets to determine which is best for them. They estimate sales/production will be between 2,000,000 and 4,000,000 boxes of nails per month. They want to be able to understand their budget variances as well. Question 1: Prepare some budgets in Excel for HammerTime. a) Show the static budget based on 3,000,000 units (boxes) produced. b) Show the flexible budget based on 2,000,000 units (boxes) produced.... A Landscaping Inc. is preparing its budget for the first months of 2019. The next step... A Landscaping Inc. is preparing its budget for the first months of 2019. The next step in the budgeting process is to prepare a cash receipts schedule and a cash payments schedule. To that end the following information has been collected. 10% of all sales are for Cash. Credit customers usually pay 20% of their fee in the month that service is provided, 60% the month after, 18% the second month after receiving service. The remaining 2% is written off... How can you analyze the current budget of a company by preparing an analysis of the... How can you analyze the current budget of a company by preparing an analysis of the financial results with specific emphasis on positive and negative variances and propose possible managerial actions to correct these variances? ADVERTISEMENT Subjects Accounting Advanced Math Anatomy and Physiology Biology Chemistry Civil Engineering Computer Science Economics Electrical Engineering Finance History Math Mechanical Engineering Operations Management Physics Psychology Statistics and Probability Nursing Other ADVERTISEMENT Latest Questions The Coronavirus will obviously impact the economy of big organizations like FIFA or the NBA but... Question: what is the difference between rights of assertion and observation assertion. Include which financial statements... how to read a csv file in php and make a html table? I can't use... ABC Inc. is evaluating a project that will increase annual sales by $230,000 and annual cash... Identify the behavior, values, and consumption patterns from people in New York City versus Milan Italy. A stock has a required return of 10%, the risk-free rate is 4.5%, and the market... How do the media options available to advertisers vary in different parts of the world? (Choose... ADVERTISEMENT About @ 2020 WizEdu