see pdf attached

Problem 7-6AA Preparing production and direct materials budgets L.O. C3, P3

Black Diamond Slope Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The

company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June

30 of the current year and that 150,000 skis will be sold during the next (third) quarter. Management wants to

end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. Carbon fiber can be

purchased for $15 per pound.

Requirement 1:

Prepare the third-quarter production budget for skis. (Amounts in parentheses does not require a minus

sign.)

BLACK DIAMOND SLOPE COMPANY

Production Budget (in units)

Third Quarter

Budgeted ending inventory (skis)

Required units of available production

( )

Units to be manufactured

Requirement 2:

Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. (Omit the

"$" sign in your response. Amounts in parentheses does not require a minus sign.)

BLACK DIAMOND SLOPE COMPANY

Direct Materials Budget (in lbs, except where noted)

Third Quarter

Materials (carbon fiber) needed for production

Total materials (carbon fiber) requirements

( )

Units of materials (carbon fiber) to be purchased

Materials cost per pound $

Total cost of materials purchases $

Problem 7-6AA Preparing production and direct materials budgets L.O. C3, P3

Black Diamond Slope Company produces snow skis. Each ski requires 2 pounds of carbon fiber. The

company's management predicts that 5,000 skis and 6,000 pounds of carbon fiber will be in inventory on June

30 of the current year and that 150,000 skis will be sold during the next (third) quarter. Management wants to

end the third quarter with 3,500 skis and 4,000 pounds of carbon fiber in inventory. Carbon fiber can be

purchased for $15 per pound.

Requirement 1:

Prepare the third-quarter production budget for skis. (Amounts in parentheses does not require a minus

sign.)

BLACK DIAMOND SLOPE COMPANY

Production Budget (in units)

Third Quarter

Budgeted ending inventory (skis)

Required units of available production

( )

Units to be manufactured

Requirement 2:

Prepare the third-quarter direct materials (carbon fiber) budget; include the dollar cost of purchases. (Omit the

"$" sign in your response. Amounts in parentheses does not require a minus sign.)

BLACK DIAMOND SLOPE COMPANY

Direct Materials Budget (in lbs, except where noted)

Third Quarter

Materials (carbon fiber) needed for production

Total materials (carbon fiber) requirements

( )

Units of materials (carbon fiber) to be purchased

Materials cost per pound $

Total cost of materials purchases $"

- Sent to Accounting Expert Tutor on 11/8/2010 at 12:54pm

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