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: Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production First 60,000 Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Second 90,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Year 2 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 36,000 grams of musk oil will be on hand to start the first quarter of Year 2. First Third 150,000 Mink Caress Direct Materials Budget - Year 2 Second Quarter Fourth 100,000 Third Year 3 First 70,000 Fourth Year
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.
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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 $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:
3
points
eBook
O
Hint
References
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
First
60,000
Total units of raw materials needed
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Second
90,000
Required:
Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.
Year 2
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 36,000
grams of musk oil will be on hand to start the first quarter of Year 2.
First
Third
150,000
Mink Caress
Direct Materials Budget - Year 2
Second
Quarter
Fourth
100,000
Third
Year 3
First
70,000
Fourth
Year](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe5b66953-d8c0-491f-82b9-53ac9723ea16%2F7dd41748-45d4-4e23-a6df-edf81303a8bf%2Fvfao1du_processed.png&w=3840&q=75)
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