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: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 74,000 104,000 164,000 114,000 84,000 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: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 74,000 104,000 164,000 114,000 84,000 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.
Chapter1: Financial Statements And Business Decisions
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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.
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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: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles
74,000 104,000 164,000 114,000 84,000 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.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0be5c270-7856-4e43-843e-ba4a67a86d39%2Fe06f6c9a-fad9-49ca-a7d2-d480b424da0e%2F90onmi_processed.jpeg&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: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles
74,000 104,000 164,000 114,000 84,000 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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