Preparing production and mfg. budgets
Black Diamond co produces snow skis. Each ski requlires 2 poundsof carbon fiber. Teh co. mangement predicts that 5000 skis and 6000poiunds of carbon fiber will be ininvenotry of jun 30 of thecureent year andthat 150,000 skis will be sold during the next (third ) quarter . A set of two skis sells for 300. Management wantsto end the quarter with 3500 skis and 4000 pounds of carbon fiberin inventory. Carbon fiber can be purchasedd fo 15 per poiund. Eachski requires .5 hours of dircet labor at 20 per hour. Variableoverhead is applies at the rate of 8 per direct labor hour. Thecompany budgets fixed overheaddof 1,782,000 for quarter.
Make a direct materials budget for carbon
