Question
Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 6,100 snowboards and 7,100 pounds of carbon fiber are
Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 6,100 snowboards and 7,100 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 161,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 4,600 snowboards and 5,100 pounds of carbon fiber in inventory. Carbon fiber costs $10 per pound. Each snowboard requires 0.5 hour of direct labor at $15 per hour. Variable overhead is budgeted at the rate of $5 per direct labor hour. The company budgets fixed overhead of $1,793,000 for the quarter. Required:
1. Prepare the production budget for the third quarter. Hint: Desired ending inventory units are given.
BLACK DIAMOND COMPANY Production Budget (in units) Third Quarter Total required units Units to produce
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