first quarter of Year 3: Budgeted production, in bottles Budgeted production of Mink Caress is given bell Year 2 First Second Third Fourth 36,000 116,000 176,000 126,000 Year 3 First 96,000 ask oll has become so popular as a perfume Ingredient that it has become necessary to carry large ainst stock-outs. For this reason, the Inventory of musk oll at the end of a quarter must be equal to oduction needs. Some 34,400 grams of musk oll will be on hand to start the first quarter of Year 2 quired: apare a direct materials budget for musk oll, by quarter and in total, for Year 2
first quarter of Year 3: Budgeted production, in bottles Budgeted production of Mink Caress is given bell Year 2 First Second Third Fourth 36,000 116,000 176,000 126,000 Year 3 First 96,000 ask oll has become so popular as a perfume Ingredient that it has become necessary to carry large ainst stock-outs. For this reason, the Inventory of musk oll at the end of a quarter must be equal to oduction needs. Some 34,400 grams of musk oll will be on hand to start the first quarter of Year 2 quired: apare a direct materials budget for musk oll, by quarter and in total, for Year 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Two grams of musk oll 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 oll 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:
Budgeted production, in bottles
Year 2
Second
First
Third
36,000 116,000 176,000
Musk oll has become so popular as a perfume Ingredient that it has become necessary to carry large inventories as a precaution
against stock-outs. For this reason, the Inventory of musk oll at the end of a quarter must be equal to 20% of the following quarter's
production needs. Some 34,400 grams of musk oll will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oll, 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
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Fourth
126,000
Mink Caress
Direct Materials Budget-Year 2
First
Quarter
Year 3
First
96,000
Second
Third
Fourth
Year
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