Required information [The following information applies to the questions displayed below) Black Diamond Company produces snow skis: Each ski requires 1 pounds of carbon fiber. The company's management predicts that 5,700 skis and 6700 pounds of carbon fiber will be in inventory on June 30 of the current year and that 157,000 skis will be sold during the next (third) quarter. A set of two skis sells for $370. Management wants to end the third quarter with 4,200 skis and 4,700 pounds of carbon fiber in Inventory. Carbon fiber can be purchased for $22 per pound. Each ski requires 0.5 hours of direct labor at $27 per hour. Variable overhead is applied at the rate of $15 per direct labor hour. The company budgets fixed overhead of $1,789,000 for the quarter. 4. Prepare the factory overhead budget for the third quarter. BLACK DIAMOND COMPANY Factory Overhead Budget Third Quarter Total labor hours needed Variable overhead rate per DL hour $ Budgeted variable overhead 77,750 16 Kayak Co. budgeted the following cash receipts (excluding cash receipts from loans received) and cash payments (excluding cash payments for loan principal and interest payments) for the first three months of next year Cash Cash Receipts payments January $517,000 $459,480 February 408,000 350,400 March 464.000 522.000 According to a credit agreement with its bank, Kayak requires a minimum cash balance of $30,000 at each month-end in return, the bank has agreed that the company can borrow up to $160,000 at a monthly interest rate of 1%, paid on the last day of each month. The Interest is computed based on the beginning balance of the loan for the month. The company repays loan principal with any cash in excess of $30,000 on the last day of each month. The company has a cash balance of $30,000 and a loan balance of $60,000 at January 1 Prepare monthly cash budgets for January, February, and March (Negative balances and Loan repayment amounts (if any) should be indicated with minus sign.) KAYAK COMPANY Cash Budget For January, February, and March January February Beginning cash balance 5 30,000 $ 30.000 $ Cash receipts 525,000 402.500 Total cash available 555,000 432.500 Cash payments (468.500) 1340,000) Pinterest expense 1600) (41) Preliminary cash balance 85.900 86,4501 Additional loan (loan repayment) (55.900) (4.100) Ending cash balance 30,000 s 82.350 5 Loan balance March 82.359 473.000 555,359 1532,000) 0 23.350 6.641 30,000 Loan balance $ 60,000 $ 4,100 $ Loan balance - Beginning of month Additional loan (loan repayment) Loan balance - End of month (55,900) 4,100 $ (4.100) 0 $ 6,641 6,641
