Two grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in westernSiberia. The cost of the musk oil is $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and forthe first quarter of Year 3:Year 2SecondThird84,000 114,000 174,000 124,000Year 3First94,000FirstFourthBudgeted production, in bottlesMusk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precautionagainst stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter'sproduction needs. Some 33,600 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 CaressDirect Materials Budget - Year 2QuarterFirstSecondThirdFourthYearUnits of raw materials needed per unit of finished goodsUnits of raw materials needed to meet productionTotal units of raw materials neededUnits of raw materials to be purchasedUnit cost of raw materialsCost of raw materials to purchased

Mink Caress Direct Materials Budget Quarter First Second Third Forth Year Required…

Answered: Required: Prepare a direct materials…

Business

Accounting

Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

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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