Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s management predicts that 5,500 skis and 6,500 pounds of carbon fiber will be in inventory on June 30 of the current year and that 155,000 skis will be sold during the next (third) quarter. A set of two skis sells for $350. Management wants to end the third quarter with 4,000 skis and 4,500 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $20 per pound. Each ski requires 0.4 hours of direct labor at $25 per hour. Variable overhead is applied at the rate of $13 per direct labor hour. The company budgets fixed overhead of $1,787,000 for the quarter. 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 needed for production (lbs.) Total materials requirements (lbs.) Direct materials to be purchased (lbs.) Budgeted cost of direct materials purchases
Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s management predicts that 5,500 skis and 6,500 pounds of carbon fiber will be in inventory on June 30 of the current year and that 155,000 skis will be sold during the next (third) quarter. A set of two skis sells for $350. Management wants to end the third quarter with 4,000 skis and 4,500 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $20 per pound. Each ski requires 0.4 hours of direct labor at $25 per hour. Variable overhead is applied at the rate of $13 per direct labor hour. The company budgets fixed overhead of $1,787,000 for the quarter. 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 needed for production (lbs.) Total materials requirements (lbs.) Direct materials to be purchased (lbs.) Budgeted cost of direct materials purchases
Essentials of Business Analytics (MindTap Course List)
2nd Edition
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Chapter11: Linear Optimization Models
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Problem 13P: The Silver Star Bicycle Company will manufacture both mens and womens models for its Easy-Pedal...
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Black Diamond Company produces snow skis. Each ski requires 3 pounds of carbon fiber. The company’s management predicts that 5,500 skis and 6,500 pounds of carbon fiber will be in inventory on June 30 of the current year and that 155,000 skis will be sold during the next (third) quarter. A set of two skis sells for $350. Management wants to end the third quarter with 4,000 skis and 4,500 pounds of carbon fiber in inventory. Carbon fiber can be purchased for $20 per pound. Each ski requires 0.4 hours of direct labor at $25 per hour. Variable overhead is applied at the rate of $13 per direct labor hour. The company budgets fixed overhead of $1,787,000 for the quarter.
Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases.
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