The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,960 kayaks during 2020. Each kayak will require 56 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 $150 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 fr type II workers who attach the hatches and seat and other hardware. The type I employees are paid $19 per hour, and the type II a paid $16 per hour. Manufacturing overhead is budgeted at $381,520 for 2020, broken down as follows. Variable costs Indirect materials Manufacturing supplies Maintenance and utilities Fixed costs Supervision Insurance Depreciation Total Polyethylene powder Finishing kits Type I labor Type II labor Indirect materials Manufacturing supplies Maintenance and utilities Supervision Insurance Depreciation $39,600 Total 55,440 91,080 186,120 74,000 During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs. 13,200 108,200 195,400 $381,520 $59,900 156,370 39,520 51,080 10,400 14,604 26,830 16,400 3,300 27,050 $405,454
The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,960 kayaks during 2020. Each kayak will require 56 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 $150 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 fr type II workers who attach the hatches and seat and other hardware. The type I employees are paid $19 per hour, and the type II a paid $16 per hour. Manufacturing overhead is budgeted at $381,520 for 2020, broken down as follows. Variable costs Indirect materials Manufacturing supplies Maintenance and utilities Fixed costs Supervision Insurance Depreciation Total Polyethylene powder Finishing kits Type I labor Type II labor Indirect materials Manufacturing supplies Maintenance and utilities Supervision Insurance Depreciation $39,600 Total 55,440 91,080 186,120 74,000 During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs. 13,200 108,200 195,400 $381,520 $59,900 156,370 39,520 51,080 10,400 14,604 26,830 16,400 3,300 27,050 $405,454
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text:Prepare the flexible budget for manufacturing for the quarter ended March 31, 2020. Assume activity levels of 890, 990, and
1,040 units. (List variable costs before fixed costs. Round answers to O decimal places, e.g. 125.)
Units to be Produced
Variable Costs
Polyethylene Powder
Finishing Kits
Labor - Type I
Labor - Type II
Indirect Materials
Manufacturing Supplies
aintenance and Utilities V
Total Variable Costs
Fixed Costs
Supervision
Insurance
Depreciation
Total Fixed Costs
Total Costs
$
tA
$
CURRENT DESIGNS
Rotomolded Line
Manufacturing Flexible Budget Report
For the Quarter Ended March 31, 2020
890
49840
133500
33820
42720
8900
12460
20470
301710
74000
13200
108200
195400
497110
tA
$
$
$
990
55440
148500
37620
47520
9900
13860
22770
335610
74000
13200
108200
195400
531010
tA
$
$
1,040
5824
15600
3952
4992
1040
145€
2392
35256
7400
1320
10820
19540
54796
Transcribed Image Text:The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual
production of 3,960 kayaks during 2020. Each kayak will require 56 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 $150 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 $19 per hour, and the type II are
paid $16 per hour.
Manufacturing overhead is budgeted at $381,520 for 2020, broken down as follows.
Variable costs
Indirect materials
Manufacturing supplies
Maintenance and utilities
Fixed costs
Supervision
Insurance
Depreciation
Total
Polyethylene powder
Finishing kits
Type I labor
Type II labor
Indirect materials
Manufacturing supplies
Maintenance and utilities
Supervision
Insurance
Depreciation
$39,600
Total
55,440
During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs.
91,080
186,120
74,000
13,200
108,200
195,400
$381,520
$59,900
156,370
39,520
51,080
10,400
14,604
26,830
16,400
3,300
27,050
$405,454
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