Caribbean Kayaks (CK) Maritza (which means "star of the sea") Joseph is preparing the 2022 budget for one of CK's kayaks. Extensive meetings with members of the sales department and executive management team have resulted in the following unit sales projections for 2022. Quarter 1,350 kayaks 1 Quarter 1,300 kayaks 1,100 kayaks 950 kayaks 2 Quarter 3 Quarter 4 CK's policy is to have finished goods ending inventory in a quarter equal to 15% of the next quarter's anticipated sales. Preliminary sales projections for 2023 are 1,250 units for the first quarter and 1,550 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 250 kayaks. Production of each kayak requires 65 pounds 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 17,600 pounds. The finishing kits are outsourced and can be purchased as they are needed. As a result, CK does not maintain a material amount of finishing kit inventory. The polyethylene powder used in these kayaks' costs $1.85 per pound, and the finishing kits cost $160 each. Production of a single kayak requires 2.5 hours of time by more experienced, type A employees and 4.2 hours of less-experienced type B employees. The type A employees are paid $30 per hour, and the type B employees are paid $15 per hour. Selling and administrative expenses for this line are expected to be $85 per unit sold plus $7,100 per quarter. Manufacturing overhead is assigned at 130% of labor costs.
Caribbean Kayaks (CK) Maritza (which means "star of the sea") Joseph is preparing the 2022 budget for one of CK's kayaks. Extensive meetings with members of the sales department and executive management team have resulted in the following unit sales projections for 2022. Quarter 1,350 kayaks 1 Quarter 1,300 kayaks 1,100 kayaks 950 kayaks 2 Quarter 3 Quarter 4 CK's policy is to have finished goods ending inventory in a quarter equal to 15% of the next quarter's anticipated sales. Preliminary sales projections for 2023 are 1,250 units for the first quarter and 1,550 units for the second quarter. Ending inventory of finished goods at December 31, 2021, will be 250 kayaks. Production of each kayak requires 65 pounds 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 17,600 pounds. The finishing kits are outsourced and can be purchased as they are needed. As a result, CK does not maintain a material amount of finishing kit inventory. The polyethylene powder used in these kayaks' costs $1.85 per pound, and the finishing kits cost $160 each. Production of a single kayak requires 2.5 hours of time by more experienced, type A employees and 4.2 hours of less-experienced type B employees. The type A employees are paid $30 per hour, and the type B employees are paid $15 per hour. Selling and administrative expenses for this line are expected to be $85 per unit sold plus $7,100 per quarter. Manufacturing overhead is assigned at 130% of labor costs.
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Chapter1: Introduction To Managerial Accounting
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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.
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d. Manufacturing overhead budget
e. Selling and administrative budget
Transcribed Image Text:3. Using the format demonstrated in your textbook - Prepare the
following budgets (be sure to show/demonstrate ALL calculations
- include quarterly AND yearly totals) in excel or google drive:
a. production budget
b. direct materials budget
c. direct labor budget
d. manufacturing overhead budget
e. selling and administrative budget
Transcribed Image Text:Caribbean Kayaks (CK)
Maritza (which means "star of the sea") Joseph is preparing the 2022
budget for one of CK's kayaks. Extensive meetings with members of the
sales department and executive management team have resulted in the
following unit sales projections for 2022.
Quarter
1,350
kayaks
1,300
kayaks
1
Quarter
2
Quarter
1,100
kayaks
950 kayaks
3
Quarter
4
CK's policy is to have finished goods ending inventory in a quarter equal
to 15% of the next quarter's anticipated sales. Preliminary sales projections
for 2023 are 1,250 units for the first quarter and 1,550 units for the second
quarter. Ending inventory of finished goods at December 31, 2021, will be
250 kayaks.
Production of each kayak requires 65 pounds 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 17,600
pounds. The finishing kits are outsourced and can be purchased as they are
needed. As a result, CK does not maintain a material amount of finishing
kit inventory.
The polyethylene powder used in these kayaks' costs $1.85 per pound, and
the finishing kits cost $160 each. Production of a single kayak requires 2.5
hours of time by more experienced, type A employees and 4.2 hours of
less-experienced type B employees. The type A employees are paid $30
per hour, and the type B employees are paid $15 per hour.
Selling and administrative expenses for this line are expected to be $85 per
unit sold plus $7,100 per quarter. Manufacturing overhead is assigned at
130% of labor costs.
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