Black Diamond Company produces snow skis. Each ski requires 1 pounds of carbon fiber. The companys management predicts that 5,900 skis and 6,900 pounds of carbon fiber will be in inventory on June 30 of the current year and that 159,000 skis will be sold during the next (third) quarter. A set of two skis sells for $390. Management wants to end the third quarter with 4,400 skis and 4,900 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $24 per pound. Each ski requires 0.6 hours of direct labor at $29 per hour. Variable overhead is applied at the rate of $17 per direct labor hour. The company budgets fixed overhead of $1,791,000 for the quarter.

Find:

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

Find:

Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases.

BLACK DIAMOND COMPANYDirect Labor BudgetThird QuarterUnits to be producedTotal labor hours neededLabor dollars

BLACK DIAMOND COMPANY
Direct Materials Budget
Third Quarter
Budgeted production	157,500	units
Materials needed for production
Total materials requirements (lbs.)
Materials to be purchased (lbs.)
Total cost of direct materials purchases

Find:

Prepare the direct labor budget for the third quarter.

Find:

Prepare the factory overhead budget for the third quarter.