Required information [The following information applies to the questions displayed below.] Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports that 6,900 snowboards and 7,900 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that 169,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with 5,400 snowboards and 5,900 pounds of carbon fiber in inventory. Carbon fiber costs $18 per pound. Each snowboard requires 0.5 hour of direct labor at $23 per hour. Variable overhead is budgeted at the rate of $13 per direct labor hour. The company budgets fixed overhead of $1,801,000 for the quarter. 2. Prepare the direct materials budget for the third quarter. BLACK DIAMOND COMPANY Direct Materials Budget Units to produce Budgeted units sales for month Materials needed for production (pounds) Add: Desired ending materials inventory (pounds) Total materials required (pounds) Less: Beginning materials inventory (pounds) Materials to purchase (pounds) Materials cost per pound Cost of direct materials purchases Third Quarter
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
![Required information
[The following information applies to the questions displayed below.]
Black Diamond Company produces snowboards. Each snowboard requires 2 pounds of carbon fiber. Management reports
that 6,900 snowboards and 7,900 pounds of carbon fiber are in inventory at the beginning of the third quarter, and that
169,000 snowboards are budgeted to be sold during the third quarter. Management wants to end the third quarter with
5,400 snowboards and 5,900 pounds of carbon fiber in inventory. Carbon fiber costs $18 per pound. Each snowboard
requires 0.5 hour of direct labor at $23 per hour. Variable overhead is budgeted at the rate of $13 per direct labor hour.
The company budgets fixed overhead of $1,801,000 for the quarter.
2. Prepare the direct materials budget for the third quarter.
BLACK DIAMOND COMPANY
Direct Materials Budget
Units to produce
Budgeted units sales for month
Materials needed for production (pounds)
Add: Desired ending materials inventory (pounds)
Total materials required (pounds)
Less: Beginning materials inventory (pounds)
Materials to purchase (pounds)
Materials cost per pound
Cost of direct materials purchases
Third Quarter](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F32a243a9-332f-4202-8fb4-9a30b8cacdbc%2Fd008ccf2-7b79-4770-81d4-3bcd578f619b%2Fl3fow8m_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)
![Cornerstones of Cost Management (Cornerstones Ser…](https://www.bartleby.com/isbn_cover_images/9781305970663/9781305970663_smallCoverImage.gif)