Diane Buswell is preparing the 2016 budget for one of Current Designs rotomoulded kayaks. Extensive. 1 answer below »

Diane Buswell is preparing the 2016 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 2016. Quarter 1………………….1,000 kayaks Quarter 2………………….1,500 kayaks Quarter 3……………………750 kayaks Quarter 4……………………750 kayaks Current Designs policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter s anticipated sales. Preliminary sales projections for 2017 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2015, will be 200 rotomoulded kayaks. Production of each kayak requires 54 kilograms 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, 2015, is 19,400 kilograms. 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 kilogram, 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

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