Four grams of musk oll 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 000 Second 120,000 Third 100,000 Fourth 130,000 Required: Prepare a direct materials budget for musk oll, by quarter and in total, for Year 2. Year First 100,000 Budgeted production, in bottles The inventory of musk oll 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. .
Four grams of musk oll 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 000 Second 120,000 Third 100,000 Fourth 130,000 Required: Prepare a direct materials budget for musk oll, by quarter and in total, for Year 2. Year First 100,000 Budgeted production, in bottles The inventory of musk oll 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. .
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 oll 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
,000
Second
120,000
Third
100,000
Fourth
130,000
Required:
Prepare a direct materials budget for musk oll, by quarter and in total, for Year 2.
Year
First
100,000
Bulgeted production, in bottles
The inventory of musk oll 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.
.
Transcribed Image Text:Required production 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
Mink Caress
Direct Materials Budget - Year 2
First
90,000
4
360,000
Second
Quarter
120,000
4
480,000
Third
180,000
41
720,000
Fourth
130,000
520,000
✪
Year
520,000
2,080,000
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