*Current Designs 10 (Part Level Submission) The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,680 kayaks during 2020. Each kayak will require 78 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.00 per pound, and the finishing kits cost $180 each. Each kayak will use two kinds of labor-2 hours of type I labor from people who run the oven and trim the plast and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $10 per hour, and the type II are paid $7 per hour. Manufacturing overhead is budgeted at $426,520 for 2020, broken down as follows. Variable costs Indirect materials $51,480 Manufacturing supplies 70,200 Maintenance and utilities 107,640 229,320 Fixed costs Supervision 74,000 Insurance 12,000 Depreciation 111,200 197,200 Total $426,520 During the first quarter, ended March 31, 2020, 1,220 units were actually produced with the following costs. Polyethylene powder $97,030 Finishing kits 219,900 Type I labor 24,400 Type II labor Indirect materials 26,810 13.420 Manufacturing supplies 18,337 Maintenance and utilities 30,520 Supervision 15,500 Insurance 3,000 Depreciation 27,800 Total $476,717 *(a) Prepare the annual manufacturing budget for 2020, assuming that 4,680 kayaks will be produced. (List variable costs before fixed costs.)
*Current Designs 10 (Part Level Submission) The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,680 kayaks during 2020. Each kayak will require 78 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.00 per pound, and the finishing kits cost $180 each. Each kayak will use two kinds of labor-2 hours of type I labor from people who run the oven and trim the plast and 3 hours of work from type II workers who attach the hatches and seat and other hardware. The type I employees are paid $10 per hour, and the type II are paid $7 per hour. Manufacturing overhead is budgeted at $426,520 for 2020, broken down as follows. Variable costs Indirect materials $51,480 Manufacturing supplies 70,200 Maintenance and utilities 107,640 229,320 Fixed costs Supervision 74,000 Insurance 12,000 Depreciation 111,200 197,200 Total $426,520 During the first quarter, ended March 31, 2020, 1,220 units were actually produced with the following costs. Polyethylene powder $97,030 Finishing kits 219,900 Type I labor 24,400 Type II labor Indirect materials 26,810 13.420 Manufacturing supplies 18,337 Maintenance and utilities 30,520 Supervision 15,500 Insurance 3,000 Depreciation 27,800 Total $476,717 *(a) Prepare the annual manufacturing budget for 2020, assuming that 4,680 kayaks will be produced. (List variable costs before fixed costs.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:*Current Designs 10 (Part Level Submission)
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 4,680 kayaks during 2020. Each kayak will require 78 pounds of polyethylene powder and a finishing kit
(rope, seat, hardware, etc.). The polyethylene powder used in these kayaks costs $1.00 per pound, and the finishing kits cost $180 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 $10 per hour, and the type II are paid $7 per hour.
Manufacturing overhead is budgeted at $426,520 for 2020, broken down as follows.
Variable costs
Indirect materials
$51,480
Manufacturing supplies
70,200
Maintenance and utilities
107,640
229,320
Fixed costs
Supervision
74,000
Insurance
12,000
Depreciation
111,200
197,200
Total
$426,520
During the first quarter, ended March 31, 2020, 1,220 units were actually produced with the following costs.
Polyethylene powder
$97,030
Finishing kits
219,900
Type I labor
24,400
Туре II labor
26,810
Indirect materials
13,420
Manufacturing supplies
18,337
Maintenance and utilities
30,520
Supervision
15,500
Insurance
3,000
Depreciation
27,800
Total
$476,717
*(a)
Prepare the annual manufacturing budget for 2020, assuming that 4,680 kayaks will be produced. (List variable costs before fixed costs.)
CURRENT DESIGNS
Rotomolded Line
Manufacturing Budget
For the Year Ended December 31, 2020
Units to be Produced
Variable Costs
Polyethylene Powder
$4
Finishing Kits
Labor - Type I
Labor - Type II
Indirect Materials
Manufacturing Supplies
Maintenance and Utilities
Total Variable Costs
Fixed Costs
Supervision
Insurance
Depreciation
Total Fixed Costs
Total Costs
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