The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,440 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 $1.10 per pound, and the finishing kits cost $250 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 $14 per hour, and the type II are paid $11 per hour.Manufacturing overhead is budgeted at $390,400 for 2020, broken down as follows.Variable costs Indirect materials $41,280 Manufacturing supplies 44,720 Maintenance and utilities 86,000 172,000Fixed costs Supervision 96,000 Insurance 14,400 Depreciation 108,000 218,400Total $390,400 During the first quarter, ended March 31, 2020, 910 units were actually produced with the following costs.Polyethylene powder $56,024Finishing kits 227,890Type I labor 25,480Type II labor 31,250Indirect materials 10,920Manufacturing supplies 11,867Maintenance and utilities 25,210Supervision 22,000Insurance 3,600Depreciation 27,000 Total $441,241 (a)Prepare the annual manufacturing budget for 2020, assuming that 3,440 kayaks will be produced. (List variable costs before fixed costs.)CURRENT DESIGNSRotomolded LineManufacturing BudgetFor the Year Ended December 31, 2020> >

Manufacturing budget shows the estimated cost that will be incurred in the given period of time.

Answered: The Current Designs staff has prepared…

FINANCIAL ACCOUNTING

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ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based on an estimated annual production of 3,440 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 $1.10 per pound, and the finishing kits cost $250 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 $14 per hour, and the type II are paid $11 per hour.

Manufacturing overhead is budgeted at $390,400 for 2020, broken down as follows.

Variable costs
Indirect materials		$41,280
Manufacturing supplies		44,720
Maintenance and utilities		86,000
		172,000
Fixed costs
Supervision		96,000
Insurance		14,400
Depreciation		108,000
		218,400
Total		$390,400

During the first quarter, ended March 31, 2020, 910 units were actually produced with the following costs.

Polyethylene powder		$56,024
Finishing kits		227,890
Type I labor		25,480
Type II labor		31,250
Indirect materials		10,920
Manufacturing supplies		11,867
Maintenance and utilities		25,210
Supervision		22,000
Insurance		3,600
Depreciation		27,000
Total		$441,241

(a)
Prepare the annual manufacturing budget for 2020, assuming that 3,440 kayaks will be produced. (List variable costs before fixed costs.)
CURRENT DESIGNS
Rotomolded Line
Manufacturing Budget
For the Year Ended December 31, 2020
> >

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