Question

Check my work Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of the current year and that 150,000 skis will be sold during the next (third) quarter. A set of two skis sells for $300. Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $15 per pound. Each ski requires 0.5 hours of direct labor at $20 per hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. Part 2 of 4 0.66 points Problem 07-1A Part 2 eBook 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. Print References BLACK DIAMOND COMPANY Direct Materials Budget Third Quarter Budgeted production .............. Materials needed for production (lbs.) Total materials requirements (lbs.) Direct materials to be purchased (lbs.) Budgeted cost of direct materials purchases Screenshot

Answer 1

BLACK DIAMOND COMPANY
Direct Materials Budget
Third Quarter
Budgeted production	148500	units
Materials requirement per unit	2	lbs.
Materials needed for production	297000	lbs.
Budgeted ending inventory	4000	lbs.
Total material requirements(lbs.)	301000	lbs.
Budgeted beginning inventory	6000	lbs.
Direct Materials to be purchased (lbs.)	295000	lbs.
Materials price per pound	15.00	per lb
Budgeted cost of direct material purchases	4425000
Workings:
Budgeted units sales	150000
Add: Budgeted ending inventory	3500
Less: Budgeted beginning inventory	-5000
Budgeted production	148500