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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: First 74,000 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 Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 29,600 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. ✔ Year 2 ♥ Second 104,000 ✓ IS Answer is complete but not entirely correct. Mink Caress Direct Materials Budget - Year 2 First Quarter Third 164,000 x ***** Fourth 114,000 0.00 $ Second Quarter Year 3 First 84,000 x x x x x x 0.00 $ Third Quarter x x X x x x 0.00 $ Fourth Quarter x x x x x x 0.00 $ $ Year ** ***** 0.00 x

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: First 74,000 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 Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 29,600 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. ✔ Year 2 ♥ Second 104,000 ✓ IS Answer is complete but not entirely correct. Mink Caress Direct Materials Budget - Year 2 First Quarter Third 164,000 x ***** Fourth 114,000 0.00 $ Second Quarter Year 3 First 84,000 x x x x x x 0.00 $ Third Quarter x x X x x x 0.00 $ Fourth Quarter x x x x x x 0.00 $ $ Year ** ***** 0.00 x

FINANCIAL ACCOUNTING
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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Two 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: First 74,000 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 Year 2 Second 104,000 Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 29,600 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. ✓ $ First Quarter > Answer is complete but not entirely correct. Mink Caress Direct Materials Budget - Year 2 Second Quarter Third 164,000 X X X Fourth 114,000 X X X 0.00 × $ Year 3 First 84,000 X X X X X 0.00 × $ Third Quarter X X X X X X 0.00 × $ Fourth Quarter X X X X X 0.00 × $ Year × X X X X 0.00 x
Transcribed Image Text:Two 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: First 74,000 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 Year 2 Second 104,000 Budgeted production, in bottles The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 29,600 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. ✓ $ First Quarter > Answer is complete but not entirely correct. Mink Caress Direct Materials Budget - Year 2 Second Quarter Third 164,000 X X X Fourth 114,000 X X X 0.00 × $ Year 3 First 84,000 X X X X X 0.00 × $ Third Quarter X X X X X X 0.00 × $ Fourth Quarter X X X X X 0.00 × $ Year × X X X X 0.00 x
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Direct materials purchase budget is based on production needs and is prepared to predict the materials required to meet the production needs.The direct materials purchase budget can either be prepared monthly or in quarter form.

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