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 3,800 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 $170 each. Each kayak will use two kinds of labor2 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 $16 per hour, and the type II are paid $13 per hour. Manufacturing overhead is budgeted at $378,800 for 2020, broken down as follows.

Variable costs
Indirect materials		$38,000
Manufacturing supplies		57,000
Maintenance and utilities		76,000
		171,000
Fixed costs
Supervision		84,000
Insurance		14,800
Depreciation		109,000
		207,800
Total		$378,800

During the first quarter, ended March 31, 2020, 1,000 units were actually produced with the following costs.

Polyethylene powder		$57,780
Finishing kits		170,270
Type I labor		32,000
Type II labor		40,170
Indirect materials		10,000
Manufacturing supplies		15,029
Maintenance and utilities		22,990
Supervision		18,400
Insurance		3,700
Depreciation		27,250
Total		$397,589

(a) Prepare the annual manufacturing budget for 2020, assuming that 3,800 kayaks will be produced. (List variable costs before fixed costs.)

(a) Prepare the annual manufacturing budget for 2020, assuming that 3,800 kayaks will be produced. (List variable costs before fixed costs.) CURRENT DESIGNS Rotomolded Line Manufacturing Budget For the Year Ended December 31, 2020 $ > $