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.
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.
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
Section: Chapter Questions
Problem 2CE: Refer to Cornerstone Exercise 8.1, through Requirement 1. FlashKick requires ending inventory of...
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Black Diamond Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The company’s management predicts that 5,200 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.
![Problem 22-1A Manufacturing: Preparing production and manufacturing budgets LO P1
[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.
Problem 22-1A Part 1
Required:
1. Prepare the third-quarter production budget for skis.
BLACK DIAMOND COMPANY
Production Budget (in units)
Third Quarter
Budgeted ending inventory (units)
Budgeted units sales for quarter
Required units of available production
Budgeted beginning inventory (units)
Units to be manufactured](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F473e532b-e44d-41cf-9bcf-3ab918aca620%2F4ffc97c0-cd7c-440d-a872-5a274e314ae3%2Fa9kx1r9_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 22-1A Manufacturing: Preparing production and manufacturing budgets LO P1
[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.
Problem 22-1A Part 1
Required:
1. Prepare the third-quarter production budget for skis.
BLACK DIAMOND COMPANY
Production Budget (in units)
Third Quarter
Budgeted ending inventory (units)
Budgeted units sales for quarter
Required units of available production
Budgeted beginning inventory (units)
Units to be manufactured
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