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Required information [The following information applies to the questions displayed below.) Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management
Required information [The following information applies to the questions displayed below.) Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 6,900 snowboards and 7,900 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 169,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 5,400 snowboards and 5,900 pounds of carbon fiber in inventory. Carbon fiber costs $18 per pound. Each snowboard requires 0.5 hour of direct labor at $23 per hour. Variable overhead is budgeted at the rate of $13 per direct labor hour. The company budgets fixed overhead of $1,801,000 for the quarter. 2. Prepare the direct materials budget for the third quarter. BLACK DIAMOND COMPANY Direct Materials Budget Third Quarter Units to produce Budgeted units sales for month Materials needed for production (pounds) Add: Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases
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