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 6,400 snowboards and 7,400 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 164,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 4,900 snowboards and 5,400 pounds of carbon fiber in inventory. Carbon fiber costs $13 per pound. Each snowboard requires 0.5 hour of direct labor at $18 per hour. Variable overhead is budgeted at the rate of $8 per direct labor hour. The company budgets fixed overhead of $1,796,000 for the quarter. 2. Prepare the direct materials budget for the third quarter. BLACK DIAMOND COMPANY Direct Materials Budget Third Quarter Units to produce Materials needed for production (pounds) Total materials required (pounds) Materials to purchase (pounds) Cost of direct materials purchases
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
2. Prepare the direct materials budget for the third quarter.
For the left columns you will be using the prompted drop down options. There are 4 drop downs that need to be completed.
**For the first drop down under "units to produce" the drop down options to choose from are:
Budgeted units sales for month,
Materials cost per pound,
Materials required per unit (pounds),
Materials to be purchased**
**For the second and third drop down the options are:
Add: Beginning material as inventory (pounds),
Add: Desired ending materials inventory (pounds),
Less: Beginning materials inventory (pounds),
Less: Desired ending materials inventory (pounds).**
**For the last drop down option above "Cost of direct materials purchased", the drop down options are:
Budgeted units sales for month,
Materials cost per pound,
Materials required per unit (pounds),
Materials to be purchased**
For the second column you are prompted to fill in the blanks with numbers. Please use the exact format in the photo. Thank you!
![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 6,400 snowboards and 7,400 pounds of carbon fiber are in inventory at the
beginning of the third quarter, and that 164,000 snowboards are budgeted to be sold during the third
quarter. Management wants to end the third quarter with 4,900 snowboards and 5,400 pounds of carbon
fiber in inventory. Carbon fiber costs $13 per pound. Each snowboard requires 0.5 hour of direct labor at
$18 per hour. Variable overhead is budgeted at the rate of $8 per direct labor hour. The company
budgets fixed overhead of $1,796,000 for the quarter.
2. Prepare the direct materials budget for the third quarter.
BLACK DIAMOND COMPANY
Direct Materials Budget
Third Quarter
Units to produce
Materials needed for production (pounds)
Total materials required (pounds)
Materials to purchase (pounds)
Cost of direct materials purchases](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F98e87c1e-d790-489b-a066-bf9d39e643de%2F8aefc2ce-43fa-406d-863e-4d70a843c80d%2Fwpnnm9_processed.jpeg&w=3840&q=75)
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