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 Il 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 $39,600 55,440 Depreciation Total 91,080 186,120 74,000 13,200 108,200 195,400 $381,520 During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs. Polyethylene powder $59,900 Finishing kits 156,370 Type I labor 39.520 Type Il labor 51,080 Fl Indirect materials 10,400 Manufacturing supplies 14,604 Maintenance and utilities 26,830 Supervision 16,400 Insurance 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 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 Il 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 $39,600 55,440 Depreciation Total 91,080 186,120 74,000 13,200 108,200 195,400 $381,520 During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs. Polyethylene powder $59,900 Finishing kits 156,370 Type I labor 39.520 Type Il labor 51,080 Fl Indirect materials 10,400 Manufacturing supplies 14,604 Maintenance and utilities 26,830 Supervision 16,400 Insurance 3,300 27,050 $405,454
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
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
>
>
>
>
>
>
>
>
tA
$
$
CURRENT DESIGNS
Rotomolded Line
Manufacturing Flexible Budget Report
For the Quarter Ended March 31, 2020
890
$
$
$
990
$
$
$
1,040
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
55,440
Total
91,080
186,120
During the first quarter, ended March 31, 2020, 1,040 units were actually produced with the following costs.
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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