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Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of te current vear and that 150,000 skis will be sold during the next (third) quarter. A set of two skis sells for S300, Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. entory. Carbon fiber can be purchased for $15 per pound. Each ski requires 0.5 hours of direct labor at c00 ner hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. bo Required 1. Prepare the third-quarter production budget for skis. 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. 3. Prepare the direct labor budget for the third quarter. 4. Prepare the factory overhead budget for the third quarter.

Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of te current vear and that 150,000 skis will be sold during the next (third) quarter. A set of two skis sells for S300, Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. entory. Carbon fiber can be purchased for $15 per pound. Each ski requires 0.5 hours of direct labor at c00 ner hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. bo Required 1. Prepare the third-quarter production budget for skis. 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. 3. Prepare the direct labor budget for the third quarter. 4. Prepare the factory overhead budget for the third quarter.

Cornerstones of Cost Management (Cornerstones Series)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
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Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of te current vear and that 150,000 skis will be sold during the next (third) quarter. A set of two skis sells for S300, Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. entory. Carbon fiber can be purchased for $15 per pound. Each ski requires 0.5 hours of direct labor at c00 ner hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. bo Required 1. Prepare the third-quarter production budget for skis. 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. 3. Prepare the direct labor budget for the third quarter. 4. Prepare the factory overhead budget for the third quarter.
Transcribed Image Text:Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June 30 of te current vear and that 150,000 skis will be sold during the next (third) quarter. A set of two skis sells for S300, Management wants to end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. entory. Carbon fiber can be purchased for $15 per pound. Each ski requires 0.5 hours of direct labor at c00 ner hour. Variable overhead is applied at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,782,000 for the quarter. bo Required 1. Prepare the third-quarter production budget for skis. 2. Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. 3. Prepare the direct labor budget for the third quarter. 4. Prepare the factory overhead budget for the third quarter.
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