Required information Problem 20-1A Manufacturing: Preparing production and manufacturing budgets LO P1 {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 6,400 skis and 7,400 pounds of carbon fiber will be in inventory on June 30 of the current year and that 164.000 skis will be sold during the next (third) quarter. A set of two skis sells for $440. Management wants to end the third quarter with 4,900 skis and 5.400 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $13 per pound. Each ski requires 0.5 hours of direct labor at $18 per hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,796,000 for the quarter. Problem 20-1A Part 1 Required: 1. Prepare the third-quarter production budget for skis. BLACK DIAMOND COMPANY Production Budget (in units) Third Quarter Budgeted ending inventory (units) Budgeted units sales for quarter Required units of available production production Budgeted ending inventory (units) Units to be manufactured 4,900 164,000 168.900 Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's mang predicts that 6,400 skis and 7,400 pounds of carbon fiber will be in inventory on June 30 of the current year an 164.000 skis will be sold during the next (third) quarter. A set of two skis sells for $440. Management wants to e third quarter with 4,900 skis and 5,400 pounds of carbon fiber in inventory. Carbon fiber can be purchased for! pound. Each ski requires 0.5 hours of direct labor at $18 per hour. Variable overhead is applied at the rate of $8 labor hour. The company budgets fixed overhead of $1,796,000 for the quarter. Problem 20-1A Part 2 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. 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 1 of 4 !!! Next > Required information Problem 20-1A Manufacturing: Preparing production and manufacturing budgets LO P1 (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 6,400 skis and 7,400 pounds of carbon fiber will be in inventory on June 30 of the current year and that 164,000 skis will be sold during the next (third) quarter. A set of two skis sells for $440. Management wants to end the third quarter with 4,900 skis and 5,400 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $13 per pound. Each ski requires 0.5 hours of direct labor at $18 per hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,796,000 for the quarter. Problem 20-1A Part 3 . Prepare the direct labor budget for the third quarter. BLACK DIAMOND COMPANY Direct Labor Budget Third Quarter Units to be produced Total labor hours needed Budgeted direct labor cost Problem 20-1A Part 4 4. Prepare the factory overhead budget for the third quarter. BLACK DIAMOND COMPANY Factory Overhead Budget Third Quarter Total labor hours needed
