Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 100,000 Budgeted production, in bottles. The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 80,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Year 2 Second Third Fourth 130,000 190,000 140,000 Units of raw materials to be purchased. Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 Year 3 First 110,000 First Quarter Second Quarter Third Quarter Fourth Quarter Year
Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the musk oil is $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 100,000 Budgeted production, in bottles. The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 80,000 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Year 2 Second Third Fourth 130,000 190,000 140,000 Units of raw materials to be purchased. Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 Year 3 First 110,000 First Quarter Second Quarter Third Quarter Fourth Quarter Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
Manji
![Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western
Siberia. The cost of the musk oil is $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
First
100,000
Budgeted production, in bottles
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 80,000
grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Total units of raw materials needed
Year 2
Second Third Fourth
130,000 190,000 140,000
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Mink Caress
Direct Materials Budget - Year 2
Year 3
First
110,000
First Quarter Second Quarter
Third Quarter Fourth Quarter
Year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F11181c38-a20d-4ed4-ae72-5fa50945692c%2F4b9f85d7-6862-493c-87d1-4ed98bc5998a%2F78y9qhl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western
Siberia. The cost of the musk oil is $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
First
100,000
Budgeted production, in bottles
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 80,000
grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Total units of raw materials needed
Year 2
Second Third Fourth
130,000 190,000 140,000
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Mink Caress
Direct Materials Budget - Year 2
Year 3
First
110,000
First Quarter Second Quarter
Third Quarter Fourth Quarter
Year
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education