Answer:
1. Production budget for third quarter for skis - 162,500 skis
2. Direct materials budget for Carbon Fiber for quarter 3 - 323,000 pounds
Cost of carbon Fiber purchases - $ 4,199,000
3. Direct Labor budget for quarter 3 - $ 1,462,500
4. Factory overhead budget for quarter 3 - $ 2,446,000
Explanation:
Computation of Production budget for quarter 3 for skis
Closing inventory- skis end of quarter 3 4,900 skis
Add: Sales for quarter 3 - skis 164,000 skis
Less: Opening inventory - skis <u>( 6,400)</u> skis
Production for skis in units 162,500 skis
Computation of direct material budget for quarter 3
Closing inventory Carbon fiber 5,400 pounds
Add: Consumption of Carbon fiber in production
162,500 skis * 2 pounds 325,000 pounds
Less: Closing inventory Carbon fiber <u> ( 7,400) </u>pounds
Direct Materials carbon Fiber Budgeted Purchases 323,000 pounds
Cost of Carbon Fiber Purchases ($ 13*323,000 pounds) $ 4,199,000
Computation of direct labor budget for quarter 3
Production of skis for quarter 3 162,500 skis
Direct Labor hours per unit 0.5 hours
Cost per Direct Labor Hours $ 18 per hour
Total Direct Labor Budget (162,500 skis* 0.5 hours * $ 18 ) $ 1,462,500
Computation of Factory overhead budget for quarter 3
Production of skis for quarter 3 162,500 skis
Variable costs $ 8 per labor hours ( 81,250 hours * $ 8) $ 650,000
Fixed overhead per quarter <u>$ 1,796,000</u>
Total overhead for quarter 3 $ 2,446,000
