Question

antot Required information The following information applies to the questions displayed below) Black Diamond Company produces snow skis Each ski requires 2 pounds of carbon fiber. The company's management predicts that 6.900 skis and 7.900 pounds of carbon fiber will be in inventory on June 30 of the current year and that 169.000 skis will be sold during the next third quarter. A set of two skis sells for $490. Management wants to end the third quarter with 5.400 skis and 5,000 pounds of carbon fiber in Inventory Carbon fiber can be purchased for $18 per pound Each ski requires 0.5 hours of direct labor at $23 per hour. Variable overhead is applied at the rate of $13 per direct labor hout the company budgets foxed overhead of $1301000 for the quarter Required: 1. Prepare the third-quarter production budget for skis BLACK DIAMOND COMPANY Production Budget in units) Third Quarter Required units of available production Units to be manufactured

Answer 1

Production budget
Budgeted sales	169000
Ending Finished goods Inventory	5400
Required units of production	174400
Less: beginning Finished goods inventory	6900
Units to be manufactured	167500
Direct Material Budget
Third qtr
Budgeted Production	167500
Pounds of carbon require	2
Material needed for production	335000
Ending Raw Material Inventory	5900
Total Material Required	340900
Less: beginning Raw Material Inventory	7900
Direct material to be purchased	333000
Cost per pound	2
Budegetd cost of direct material	666000
Direct labor budget
Units to be Produced	167500
No. of hours per unit required	0.5
Total labor hours needed	83750
Rate per hour	23
Budgeted Direct labor cost	1926250
Factory overhead Budget
Total labor hours needed	83750
Variable overhead rate per hour	13
Variable overhead	1088750
Fixed overhead (1801000/4 qtr*1)	450250
Total Budgeted Factory overhead cost	1539000
If any doubt please comment