Two grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a company in western Siberia. The cost of the musk oil is $1.70 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of Year 3: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 78,000 108,000 168,000 118,000 88,000 The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 31, 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.

Two grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a company in western Siberia. The cost of the musk oil is $1.70 per gram. Budgeted quarterly production of Mink Caress is given below for Year 2 and the first quarter of Year 3: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 78,000 108,000 168,000 118,000 88,000 The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 31, 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.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter9: Profit Planning And Flexible Budgets

Section: Chapter Questions

Problem 23BEA: Preparing a Direct Materials Purchases Budget Patrick Inc. makes industrial solvents sold in...

See similar textbooks

Similar questions

Please help me
Follow the requirements.
ToraBika corporation manufactures and sells a seasonal product that has peak sales in the third quarter. The following information concerns operations for year 2-the coming year and for the first two quarters of year 3: The company’s single product sells for Tk. 10 per unit. Budgeted unit sales for the next six quarters are as follows(all sales are credit sales): year 2 quarter Year 3 quarter 1 2 3 4 1 2 40,000 units 60,000 units 1,00,000 units 50,000 units 60,000 units 70,000 units Sales are collected in the following pattern: 65% in the quarter the sales are made, and the remaining 35% in the following quarter. On January 1, year 2, the company’s balance sheet showed tk. 63,000 in accounts receivable, all of which will be collected in the first quarter of the year. Bad debts are negligible and can be ignored. c. Raw materials purchased in the following patterns: Y2 y3 Q1 Q2 Q3 Q4 Q5 Q6…
2. Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,780,000 Quarter 2 5,690,000 Quarter 3 630,000 Quarter 4 8,200,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,080,000 and for the fourth quarter of the current year are $7,220,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank b0590a054f99004_1 $fill in the blank b0590a054f99004_2 4, current year fill in the blank…
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,620,000 Quarter 2 5,150,000 Quarter 3 4,890,000 Quarter 4 8,480,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,040,000 and for the fourth quarter of the current year are $7,680,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank 1d3d12fb3fb1016_1 $fill in the blank 1d3d12fb3fb1016_2 4, current year fill in the blank…
Joe produces tuna in cans. The sales budget for the first four months of the year is presented below.Unit Sales Dollar SalesJanuary 200,000 $150,000February 240,000 180,000March 220,000 165,000April 200,000 150,000Company policy requires that ending inventories for each month be 25 percent of next month’s sales. At the beginning of January, the inventory of tuna is 38,000 cans.RequiredPrepare a production budget for the first quarter of the year. Show the number of cans that should be produced each month as well as for the quarter in total.
Bokgoni Corporation has the following budgeted sales for the selected four-month period:Month Unit Sales July 20,000 August 35,000 September 25,000 October 30,000 Sales price per unit is R180Plans are to have an inventory of finished product equal to 20% of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st.Three Kilogram of materials are required for each unit produced. Each Kilogram of material costs R20. Inventory levels for materials equal 30% of the needs for the next month.Desired ending inventory for September is 25,200 Kilogram of material. Beginning inventory for July was 20,700 Kilogram of material.Each unit requires 0.6 hours of direct labor and the average wage rate is $16 per hour. Variable…
ABC buys insurance for its fleet of delivery trucks. The cost is $18,000 per year and is paid in two instalments, on January 1 and July 1 of each year. The amount of cash disbursement that will appear on the February cash budget is: O$1,500 $9,000 $18,000
Chinton Company sells air purifiers to customers for $150 per unit. An overseas company supplies the purifiers for $80 per unit. All sales are for cash and the company pays the supplier immediately. The company has budgeted the following data for the first quarter: January February 2,500 Sales (in units) Cash, beginning balance Selling and administrative (of which depreciation, $8,000) Required minimum cash balance March 2,000 $42,000 $205,000 $20,000 2,100 ? $205,000 $20,000 $205,000 $20,000 company will borrow cash from a bank through their credit-line arrangement on the first day of each month. Assume that they can borrow in increment of $1,000. The bank requires an interest payment at the end of each month at a monthly rate of 1%, starting from the first month when the company borrows cash. What is the 3 If necessary, the closest amount of cash balance on February 1? JANARLY SALE S 30,0 A. $ 30,959 20,640 30,920 30,340 E. None of the above В. 24 COGSO 00 160,0 С. 24 140000 42,000…
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,780,000 Quarter 2 5,580,000 Quarter 3 3,150,000 Quarter 4 8,400,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,450,000 and for the fourth quarter of the current year are $7,060,000. Required: 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank $fill in the blank 4, current year fill in the blank fill in the blank 1, next year fill in the blank fill in the blank…
Soft and Silky, Inc., manufactures bedding sets. The budgeted production is for 53,000 comforters in the coming year. Each comforter requires 6 yards of material. The estimated January 1 beginning inventory is 31,000 yards. The desired ending balance is 30,000 yards of material. If the material costs $1.50 per yard, what is the materials budget for the coming year? a.$385,500 b.$478,500 c.$475,500 d.$477,000
Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted the following sales: Quarter 1 $4,740,000 Quarter 2 5,860,000 Quarter 3 3,720,000 Quarter 4 8,580,000 In Shalimar’s experience, 10 percent of sales are paid in cash. Of the sales on account, 65 percent are collected in the quarter of sale, 25 percent are collected in the quarter following the sale, and 7 percent are collected in the second quarter after the sale. The remaining 3 percent are never collected. Total sales for the third quarter of the current year are $5,410,000 and for the fourth quarter of the current year are $7,070,000. Required: Question Content Area 1. Calculate cash sales and credit sales expected in the last two quarters of the current year, and in each quarter of next year. Quarter Cash Sales Credit Sales 3, current year $fill in the blank 9d2fe401a04bf88_1 $fill in the blank 9d2fe401a04bf88_2 4, current year fill in the blank…