Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Two 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 74,000 Year 2 Second Third Fourth 104,000 164,000 114,000 Year 3 First 84,000 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 29,600 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.
Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Two 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 74,000 Year 2 Second Third Fourth 104,000 164,000 114,000 Year 3 First 84,000 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 29,600 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.
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![Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Two 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
First
74,000
Estimated sales in units of finished goods
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Add: Desired units of ending raw materials inventory
Total units of raw materials needed
Less: Units of beginning raw materials inventory
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
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 29,600
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.
Year 2
✔
Second Third Fourth
104,000 164,000 114,000
✓
Mink Caress
Direct Materials Budget - Year 2
First
Second
Quarter
Quarter
$
X Answer is not complete.
74,000 ✓
2✔
148,000
41,600✔
189,600✔
(29,600)✓
1.50 $
104,000✔
2✔
208,000
65,600✔
273,600✔
(41,600) ✔
1.50
Year 3
First
84,000
$
Third
Quarter
164,000
2✔
328,000
45,600✔
373,600✔
(65,600)✓
1.50 $
Fourth
Quarter
114,000 ✓
2✔
228,000
16,800 X
224,800
(45,600)✓
1.50 $
Year
456,000✔
2✔
912,000
169,600 x
1,081,600
(16,800) x
1.50](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F114e7732-16de-4cbe-b67b-6d074c4b6fff%2F179681d6-dbe9-4cb4-b8f5-208c197bcc4c%2Flo561w_processed.png&w=3840&q=75)
Transcribed Image Text:Exercise 8-3 (Algo) Direct Materials Budget [LO8-4]
Two 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
First
74,000
Estimated sales in units of finished goods
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Add: Desired units of ending raw materials inventory
Total units of raw materials needed
Less: Units of beginning raw materials inventory
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
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 29,600
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.
Year 2
✔
Second Third Fourth
104,000 164,000 114,000
✓
Mink Caress
Direct Materials Budget - Year 2
First
Second
Quarter
Quarter
$
X Answer is not complete.
74,000 ✓
2✔
148,000
41,600✔
189,600✔
(29,600)✓
1.50 $
104,000✔
2✔
208,000
65,600✔
273,600✔
(41,600) ✔
1.50
Year 3
First
84,000
$
Third
Quarter
164,000
2✔
328,000
45,600✔
373,600✔
(65,600)✓
1.50 $
Fourth
Quarter
114,000 ✓
2✔
228,000
16,800 X
224,800
(45,600)✓
1.50 $
Year
456,000✔
2✔
912,000
169,600 x
1,081,600
(16,800) x
1.50
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