Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Three grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a company in western Siberia. The cost of the musk oil is $2.20 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of Year 3: First 72,000 Year 2 Second 102,000 Third 162,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Fourth 112,000 Budgeted production, in bottles The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 43,200 grams of musk oll will be on hand to start the first quarter of Year 2. Mink Caress Direct Materials Budget - Year 2 Year 3 First 82,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Question
Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Three grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a company in western Siberia. The
cost of the musk oil is $2.20 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of
Year 3:
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
First
72,000
Total units of raw materials needed
Year 2
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Second
102,000
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Budgeted production, in bottles
The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 43,200 grams
of musk oil will be on hand to start the first quarter of Year 2.
Third
162,000
Mink Caress
Direct Materials Budget - Year 2
First
Fourth
112,000
Second
Quarter
Year 3
First
82,000
Third
Fourth
Year
Transcribed Image Text:Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Three grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a company in western Siberia. The cost of the musk oil is $2.20 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of Year 3: Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production First 72,000 Total units of raw materials needed Year 2 Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Second 102,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Budgeted production, in bottles The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 43,200 grams of musk oil will be on hand to start the first quarter of Year 2. Third 162,000 Mink Caress Direct Materials Budget - Year 2 First Fourth 112,000 Second Quarter Year 3 First 82,000 Third Fourth Year
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Budgeting
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.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education