The Current Designs staff has prepared the annual manufacturing budget for the rotomolded line based...
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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 76 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 $230 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 $10 per hour, and the type II are paid $7 per hour. Manufacturing overhead is budgeted at $371,520 for 2020 , broken down as follows. During the first quarter, ended March 31, 2020, 910 units were actually produced with the following costs. (a) Prepare the annual manufacturing budget for 2020 , assuming that 3,440 kayaks will be produced. (List variable costs before fixed costs.)
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