Black Diamond Company produces snowboards. Each snowboard requires 3 pounds of carbon fiber. Management reports that...
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Black Diamond Company produces snowboards. Each snowboard requires 3 pounds of carbon fiber. Management reports that 6,800 snowboards and 7,800 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 168,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 5,300 snowboards and 5,800 pounds of carbon fiber in inventory. Carbon fiber costs $17 per pound. Each snowboard requires 0.5 hour of direct labor at $22 per hour. Variable overhead is budgeted at the rate of $12 per direct labor hour. The company budgets fixed overhead of $1,800,000 for the quarter. Required: 1. Prepare the production budget for the third quarter. Hint: Desired ending inventory units are given. BLACK DIAMOND COMPANY Production Budget (in units) Third Quarter Total required units Units to produce Black Diamond Company produces snowboards. Each snowboard requires 3 pounds of carbon fiber. Management reports that 6,800 snowboards and 7,800 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 168,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 5,300 snowboards and 5,800 pounds of carbon fiber in inventory. Carbon fiber costs $17 per pound. Each snowboard requires 0.5 hour of direct labor at $22 per hour. Variable overhead is budgeted at the rate of $12 per direct labor hour. The company budgets fixed overhead of $1,800,000 for the quarter. Required: 1. Prepare the production budget for the third quarter. Hint: Desired ending inventory units are given. BLACK DIAMOND COMPANY Production Budget (in units) Third Quarter Total required units Units to produce
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