Dorothy Taylor is preparing the 2022 budget for one of Current Designs’ rotomoulded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2022. Quarter 1 2,900 kayaks Quarter 2 3,400 kayaks Quarter 3 2,600 kayaks Quarter 4 2,600 kayaks Current Designs’ policy is to have finished goods ending inventory in a quarter equal to 25% of the next quarter’s anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 3,400 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 725 rotomoulded kayaks. Production of each kayak requires 40 kg of polyethylene powder and a finishing kit (rope, seat, hardware, etc). Company policy is that the ending inventory of polyethylene powder should be 20% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 21,800 kg. 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 $1.20 per kilogram, and the finishing kits cost $180 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 $13 per hour, and the type II employees are paid $10 per hour. Selling and administrative expenses for this line are expected to be $44 per unit sold plus $7,900 per quarter. Manufacturing overhead is assigned at 140% of labour costs. Prepare the production budget for this product line by quarter and in total for 2022. CURRENT DESIGNS Direct Materials Budget--Polyethylene Powder For the Year Ending December 31, 2022 Quarter Q1 Q2 Q3 Q4 TOTAL select an opening direct materials budget item enter a number of units enter a number of units enter a number of units enter a number of units enter a number of units select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part select between addition and deduction : select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part select between addition and deduction : select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part select an item $enter a dollar amount rounded to 2 decimal places select a summarizing line for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part select an item enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount select a closing direct materials budget item $enter a total amount $enter a total amount
Dorothy Taylor is preparing the 2022 budget for one of Current Designs’ rotomoulded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2022. Quarter 1 2,900 kayaks Quarter 2 3,400 kayaks Quarter 3 2,600 kayaks Quarter 4 2,600 kayaks Current Designs’ policy is to have finished goods ending inventory in a quarter equal to 25% of the next quarter’s anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 3,400 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 725 rotomoulded kayaks. Production of each kayak requires 40 kg of polyethylene powder and a finishing kit (rope, seat, hardware, etc). Company policy is that the ending inventory of polyethylene powder should be 20% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 21,800 kg. 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 $1.20 per kilogram, and the finishing kits cost $180 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 $13 per hour, and the type II employees are paid $10 per hour. Selling and administrative expenses for this line are expected to be $44 per unit sold plus $7,900 per quarter. Manufacturing overhead is assigned at 140% of labour costs. Prepare the production budget for this product line by quarter and in total for 2022. CURRENT DESIGNS Direct Materials Budget--Polyethylene Powder For the Year Ending December 31, 2022 Quarter Q1 Q2 Q3 Q4 TOTAL select an opening direct materials budget item enter a number of units enter a number of units enter a number of units enter a number of units enter a number of units select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part enter a total number of kilograms for the first part select between addition and deduction : select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part enter a total number of kilograms for the second part select between addition and deduction : select an item enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms enter a number of kilograms select a summarizing line for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part enter a total number of kilograms for the third part select an item $enter a dollar amount rounded to 2 decimal places select a summarizing line for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part $enter a total dollar amount for the fourth part select an item enter a dollar amount enter a dollar amount enter a dollar amount enter a dollar amount select a closing direct materials budget item $enter a total amount $enter a total amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
Dorothy Taylor is preparing the 2022 budget for one of Current Designs’ rotomoulded kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2022.
Current Designs’ policy is to have finished goods ending inventory in a quarter equal to 25% of the next quarter’s anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 3,400 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 725 rotomoulded kayaks.
Production of each kayak requires 40 kg of polyethylene powder and a finishing kit (rope, seat, hardware, etc). Company policy is that the ending inventory of polyethylene powder should be 20% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 21,800 kg. 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 $1.20 per kilogram, and the finishing kits cost $180 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 $13 per hour, and the type II employees are paid $10 per hour.
Selling and administrative expenses for this line are expected to be $44 per unit sold plus $7,900 per quarter. Manufacturing overhead is assigned at 140% of labour costs.
| Quarter 1 | 2,900 | kayaks | |
| Quarter 2 | 3,400 | kayaks | |
| Quarter 3 | 2,600 | kayaks | |
| Quarter 4 | 2,600 | kayaks |
Current Designs’ policy is to have finished goods ending inventory in a quarter equal to 25% of the next quarter’s anticipated sales. Preliminary sales projections for 2023 are 1,100 units for the first quarter and 3,400 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 725 rotomoulded kayaks.
Production of each kayak requires 40 kg of polyethylene powder and a finishing kit (rope, seat, hardware, etc). Company policy is that the ending inventory of polyethylene powder should be 20% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2021, is 21,800 kg. 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 $1.20 per kilogram, and the finishing kits cost $180 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 $13 per hour, and the type II employees are paid $10 per hour.
Selling and administrative expenses for this line are expected to be $44 per unit sold plus $7,900 per quarter. Manufacturing overhead is assigned at 140% of labour costs.
Prepare the production budget for this product line by quarter and in total for 2022.
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CURRENT DESIGNS
Direct Materials Budget--Polyethylene Powder For the Year Ending December 31, 2022 |
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|---|---|---|---|---|---|---|---|---|---|---|
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Quarter
|
||||||||||
|
Q1
|
Q2
|
Q3
|
Q4
|
TOTAL
|
||||||
|
select an opening direct materials budget item
|
enter a number of units | enter a number of units | enter a number of units | enter a number of units | enter a number of units | |||||
|
select an item
|
enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | |||||
|
select a summarizing line for the first part
|
enter a total number of kilograms for the first part | enter a total number of kilograms for the first part | enter a total number of kilograms for the first part | enter a total number of kilograms for the first part | enter a total number of kilograms for the first part | |||||
|
select between addition and deduction : select an item
|
enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | |||||
|
select a summarizing line for the second part
|
enter a total number of kilograms for the second part | enter a total number of kilograms for the second part | enter a total number of kilograms for the second part | enter a total number of kilograms for the second part | enter a total number of kilograms for the second part | |||||
|
select between addition and deduction : select an item
|
enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | enter a number of kilograms | |||||
|
select a summarizing line for the third part
|
enter a total number of kilograms for the third part | enter a total number of kilograms for the third part | enter a total number of kilograms for the third part | enter a total number of kilograms for the third part | enter a total number of kilograms for the third part | |||||
|
select an item
|
$enter a dollar amount rounded to 2 decimal places | |||||||||
|
select a summarizing line for the fourth part
|
$enter a total dollar amount for the fourth part | $enter a total dollar amount for the fourth part | $enter a total dollar amount for the fourth part | $enter a total dollar amount for the fourth part | $enter a total dollar amount for the fourth part | |||||
|
select an item
|
enter a dollar amount | enter a dollar amount | enter a dollar amount | enter a dollar amount | ||||||
|
select a closing direct materials budget item
|
$enter a total amount | $enter a total amount |
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