Question

Assuming the rotomolded line is treated as a cost center, prepare a flexible budget report for manufacturing for the quarter ended March 31, 2020, when 1,050 units were produced. (List variable costs before fixed costs. Round answers to 2 decimal places, e.g. 5,275.25.)The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,000 kayaks during 2020. 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 $1.50 per pound, and the finishing kits cost $170 each. Each kayak will use two kinds of labor—2 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 $15 per hour, and the type II are paid $12 per hour.

Manufacturing overhead is budgeted at $396,000 for 2020, broken down as follows.

Variable costs
Indirect materials		$40,000
Manufacturing supplies		53,800
Maintenance and utilities		88,000
		181,800
Fixed costs
Supervision		90,000
Insurance		14,400
Depreciation		109,800
		214,200
Total		$396,000

During the first quarter, ended March 31, 2020, 1,050 units were actually produced with the following costs.

Polyethylene powder		$87,000
Finishing kits		178,840
Type I labor		31,500
Type II labor		39,060
Indirect materials		10,500
Manufacturing supplies		14,150
Maintenance and utilities		26,000
Supervision		20,000
Insurance		3,600
Depreciation		27,450
Total		$438,100

Assuming the rotomolded line is treated as a cost center, prepare a flexible budget report for manufacturing for the quarter ended March 31, 2020, when 1,050 units were produced. (List variable costs before fixed costs. Round answers to 2 decimal places, e.g. 5,275.25.)

Answer 1

Answer is given below