Three grams of musk oll 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 matenals to be purchased Unit cost of raw materials Cost of raw matonals to purchased Second 100,000 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 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 Quarter Second Fourth 110,000 Third Year 3 First 80,000 Fourth Year
Three grams of musk oll 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 matenals to be purchased Unit cost of raw materials Cost of raw matonals to purchased Second 100,000 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 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 Quarter Second Fourth 110,000 Third Year 3 First 80,000 Fourth Year
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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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 matenals to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Second
100,000
Required:
Prepare a direct materials budget for musk oll, by quarter and in total, for Year 2.
Year 2
Budgeted production, in bottles
The inventory of musk oll 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.
Third
160,000
First
Mink Caress
Direct Materials Budget - Year 2
Second
Quarter
Fourth
110,000
Third
Year 3
First
80,000
Fourth
Year
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