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 $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production First 70,000 Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Year 2 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Second 100,000 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 42,000 grams of musk oil will be on hand to start the first quarter of Year 2. First Third 160,000 Mink Caress Direct Materials Budget - Year 2 Second Quarter Fourth 110,000 Third Year 3 First 80,000 Fourth Year

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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 $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
First
70,000
Total units of raw materials needed
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purch
Year 2
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Second
100,000
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 42,000
grams of musk oil will be on hand to start the first quarter of Year 2.
First
Third
160,000
Mink Caress
Direct Materials Budget - Year 2
Second
Quarter
Fourth
110,000
Third
Year 3
First
80,000
Fourth
Year
Transcribed Image Text: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 $2.10 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production First 70,000 Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purch Year 2 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Second 100,000 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 42,000 grams of musk oil will be on hand to start the first quarter of Year 2. First Third 160,000 Mink Caress Direct Materials Budget - Year 2 Second Quarter Fourth 110,000 Third Year 3 First 80,000 Fourth Year
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