required for each bottle of musk oil is $1.50 per gram. Budgeted production of Mink Cares 3: Caress, a very popular pe
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.
![Three 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
Year 2
Year 3
First
Second
Third
Fourth
First
Budgeted production, in bottles
60,000
90,000 150,000 100,000
70,000
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000
grams of musk oil will be on hand to start the first quarter of Year 2.
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Mink Caress
Direct Materials Budget - Year 2
Quarter
First
Second
Third
Fourth
Year
Required production in units of finished goods
60,000
90,000
150,000
100,000
400,000
Units of raw materials needed per unit
hed goods
3
3
Units of raw materials needed to meet production
180,000
270,000
450,000
300,000
1,200,000
Add: Desired units of ending raw materials inventory
Total units of raw materials needed
Less: Units of beginning raw materials inventory
54,000
90,000
60,000
42,000
360,000
54,000
510,000
234,000
36,000
342,000
90,000
60,000
Units of raw materials to be purchased
198,000
306,000
420,000
282,000
1,206,000
Unit cost of raw materials
1.50
2$
1.50 $
1.50 $
1.50
2$
1.50
Cost of raw materials to purchased
297,000 $
459,000 S
630,000 $
423,000 $ 1,809,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc9d1935c-a508-429d-a215-8f480b8af8d6%2F5a71361d-0af3-45f0-b687-d035d8211b09%2Fz0ccf2g_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)