Four 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 $1.60 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 Unds of raw materials needed to meet production First 90,000 Total units of raw materials needed Second 120,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Year 2 Budgeted production, in bottles 180,000 The Inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs A total of 72,000 grams of musk oil will be on hand to start the first quarter of Year 2 Mink Caress Direct Materials Budget-Year 21 First Fourth 130,000 Second Quarter Year 3 First 100,000 Third Fourth Year
Four 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 $1.60 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 Unds of raw materials needed to meet production First 90,000 Total units of raw materials needed Second 120,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Year 2 Budgeted production, in bottles 180,000 The Inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs A total of 72,000 grams of musk oil will be on hand to start the first quarter of Year 2 Mink Caress Direct Materials Budget-Year 21 First Fourth 130,000 Second Quarter Year 3 First 100,000 Third Fourth Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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Transcribed Image Text:Four 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 $1.60 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of
Year 3
First
90,000
Units of raw materials needed per unit of finished goods
Unds of raw materials needed to meet production
Total units of raw materials needed
Second
120,000
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Year 2
Budgeted production, in bottles
180,000
The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs A total of 72,000 grams
of musk oll will be on hand to start the first quarter of Year 2
Mink Caress
Direct Materials Budget-Year 21
First
Fourth
130,000
Quarter
Second
Year 3
First
100,000
Third
Fourth
Year
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