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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 IT are paid $11 per hour. Manufacturing overhead is budgeted at 5390,400 for 2020, broken down as follows. Variable costs Indirect materials Manufacturing supplies Maintenance and utilities $41,280 44,720 86,000 172,000 Fixed costs Supervision Insurance Depreciation 96,000 14,400 108,000 218,400 $390,400 Total During the first quarter, ended March 31, 2020,910 units were actually produced with the following costs. Polyethylene powder Finishing kits Type I labor Type Il labor Indirect materials Manufacturing supplies Maintenance and utilities Supervision Insurance Depreciation Total $56,024 227,890 25,480 31,250 10,920 11,867 25,210 22,000 3,600 27,000 $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 V

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