Topic(s): Preparation of Budgets Excel Functions and Tools: Split screen tool; Absolute cell referencing Diane Buswell is preparing the 2025 budget for one of Current Designs' rotomolded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2025 and preliminary sales projections for 2026. 2025: Quarter | 1,000 kayaks Quarter 2 1,500 kayaks Quarter 3 750 kayaks Quarter 4 750 kayaks 2026: Quarter | 1,100 kayaks Quarter 2 1,500 kayaks Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Ending inventory of finished goods at December 31, 2024, will be 200 rotomolded kayaks. Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2024, is 19,400 pounds. The finishing Kits can be assembled as they are needed. As a result, Current Designs does not 'maintain a significant inventory of the finishing kits. The polyethylene powder used in these kayaks costs $1.50 per pound, and the finishing kits cost $170 each. Production of a single kayak requires 2 hours of time by more experienced, type I employees and 3 hours of finishing time by type II employees. The type I employees are paid $15 per hour, and the type I employees are paid $12 per hour. Selling and administrative expenses for this line are expected to be $45 per unit sold plus $7,500 per quarter. Manufacturing overhead is assigned at 150% of labor costs. The cost and production data in tabular form are presented here. Desired ending inventory of polyethylene powder 25% of next month's production Desired ending inventory of finished units 20% of next month's unit sales Estimated inventories Finished goods inventory at Dec. 31, 2024 200 kayaks Polyethylene powder at Dec. 31, 2024 19,400 pounds Polyethylene powder at Dec. 31, 2024 15,930 pounds Production requirements Polyethylene powder 54 pounds Finishing kit 1 kit Type I employees labor time 2 hours Type I employees labor time 3 hours Manufacturing overhead 150% of direct labor costs Cost of polyethylene powder s 1.50 per pound Cost of finishing kits 170.00 per kit Labor rate of type I employees 15.00 per hour Labor rate of type 11 employees 12.00 per hour Selling and administrative expenses 45.00 per unit sold Selling and administrative expenses. 7,500 per quarter Instructions Prepare the production budget, direct materials budget, direct labor budget, manufacturing overhead budget, and selling and administrative budget for this product line by quarter and in total for 2025. What-if Question Perform what-if analysis to answer the following: Suppose the sales in units for the third quarter are now estimated to be 1,200 units. Adjust the budgets to reflect these changes. Follow the step-by-step directions in the accompanying tutorial to prepare selected budgets for Current Designs. CURRENT DESIGNS Production Budget For the Year Ending December 31, 2025 Quarter | Quarter 2 Quarter 3 Quarter 4 Total Expected unit sales /Add: desired ending finished goods units Total required units Less: beginning finished goods units Required production units CURRENT DESIGNS Direct Materials Budget For the Year Ending December 31, 2025 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Uniits to be produced Pounds of polyethylene powder per unit Total pounds needed for production Add: desired ending inventory of powder Total pounds of powder required Less: beginning inventory of powder Pounds of polyethylene powder to be purchased Cost per pound Cost of polycthylene powder to be purchased Cost of required finishing kits Total costs for dircct materials CURRENT DESIGNS Direct Labor Budget For the Year Ending December 31, 2025 uarter | uarter 2 uarter 3 uarter 4 Total Units to be produced Number of hours of more skilled labor/unit Total number of hours of more skilled labor Hourly rate for more skilled labor Total cost of more skilled labor Units to be produced Number of hours of less skilled labor/unit Total number of hours of less skilled labor Hourly rate for less skilled labor Total cost of less skilled labor Total cost for direct labor CURRENT DESIGNS Manufacturing Overhead Budget For the Year Ending December 31, 2025 uarter | uarter 2 uarter 3 uarter 4 Total Total costs for direct labor Manufacturing overhead rate per direct labor dollar Manufacturing overhead costs CURRENT DESIGNS Selling and Administrative Budget For the Year Ending December 31, 2025 uarter | uarter 2 uarter 3 uarter 4 Total Expected unit sales Variable selling and administrative costs Fixed selling and administrative costs Total selling and administrative costs