EXERCISE 9–3 Direct Materials Budget [LO4]Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume madeby a small company in western Siberia. The cost of the musk oil is 150 roubles per kilogram.(Siberia is located in Russia, whose currency is the rouble.) Budgeted production of Mink Caressis given below by quarters for Year 2 and for the first quarter of Year 3:Year 2Year 3FirstSecondThirdFourthFirstBudgeted production, in bottles....60,00090,000150,000100,00070,000Musk oil has become so popular as a perfume ingredient that it has become necessary to carrylarge inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at theend of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000grams of musk oil will be on hand to start the first quarter of Year 2.398Chapter 9Required:Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom ofyour budget, show the amount of purchases in roubles for each quarter and for the year in total.

The direct materials budget show the purchases that should be made of the materials to meet the…

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Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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