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 $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Budgeted production, in bottles Year 2 First 72,000 Second 102,000 Third 162,000 Fourth 112,000 Year 3 First 82,000 The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 43,200 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. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 First Quarter Second Quarter Third Quarter Fourth Quarter 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 $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for
the first quarter of Year 3:
Budgeted production, in bottles
Year 2
First
72,000
Second
102,000
Third
162,000
Fourth
112,000
Year 3
First
82,000
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 43,200
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.
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Total units of raw materials needed
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Mink Caress
Direct Materials Budget - Year 2
First Quarter
Second Quarter Third Quarter
Fourth Quarter
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 $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Budgeted production, in bottles Year 2 First 72,000 Second 102,000 Third 162,000 Fourth 112,000 Year 3 First 82,000 The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 43,200 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. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 First Quarter Second Quarter Third Quarter Fourth Quarter Year
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