oblem 22-1A Manufacturing: Preparing production and manufacturing budgets LO P1 Skip to question [The following information applies to the questions displayed below.] Black Diamond Company produces...

oblem 22-1A Manufacturing: Preparing production and manufacturing budgets LO P1

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[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 5,200 skis and 6,200 pounds of carbon fiber will be in inventory on June 30 of the current year and that 152,000 skis will be sold during the next (third) quarter. A set of two skis sells for $320. Management wants to end the third quarter with 3,700 skis and 4,200 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $17 per pound. Each ski requires 0.4 hours of direct labor at $22 per hour. Variable overhead is applied at the rate of $10 per direct labor hour. The company budgets fixed overhead of $1,784,000 for the quarter.

Extracted text: 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 requirements per unit (Ibs.) Materials needed for production (Ibs.) Budgeted ending inventory (Ibs.) Total materials requirements (Ibs.) Budgeted beginning inventory (Ibs.) Direct materials to be purchased (Ibs.) Direct materials price per pound Budgeted cost of direct materials purchases