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. Thecost 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 ofYear 3:Units of raw materials needed per unit of finished goodsUnits of raw materials needed to meet productionFirst72,000Total units of raw materials neededYear 2Units of raw materials to be purchasedUnit cost of raw materialsCost of raw materials to purchasedSecond102,000Required:Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.Budgeted production, in bottlesThe 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 gramsof musk oil will be on hand to start the first quarter of Year 2.Third162,000Mink CaressDirect Materials Budget - Year 2FirstFourth112,000SecondQuarterYear 3First82,000ThirdFourthYear

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

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

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Direct Materials Purchases Budget Pasadena Candle Inc. budgeted production of 740,000 candles for the year. Wax is required to produce a candle. Assume 10 ounces of wax is required for each candle. The estimated January 1 wax inventory is 17,100 pounds. The desired December 31 wax inventory is 14,100 pounds. If candle wax costs $1.40 per pound, determine the direct materials purchases budget for the year. (One pound = 16 ounces.) Round all computed answers to the nearest whole dollar. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Pasadena Candle Inc. Direct Materials Purchases Budget For the Year Ending December 31 Pounds of wax required for production: Candles Desired ending inventory, December 31 Total units available Estimated beginning inventory, January 1 Total pounds to be purchased Unit price $ Total direct materials to be purchased $
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