Two 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 oll is $1.70 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 78,000 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 108,000 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 31,200 grams of musk oil will be on hand to start the first quarter of Year 2. Third 168,000 First Mink Caress Direct Materials Budget - Year 2 Second Quarter Fourth 118,000 Third Year 3 First 88,000 Fourth Year
Two 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 oll is $1.70 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 78,000 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 108,000 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 31,200 grams of musk oil will be on hand to start the first quarter of Year 2. Third 168,000 First Mink Caress Direct Materials Budget - Year 2 Second Quarter Fourth 118,000 Third Year 3 First 88,000 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:Two 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 $1.70 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
78,000
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
108,000
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 31,200 grams of musk oil will be on hand to start the first quarter of Year 2.
Third
168,000
First
Mink Caress
Direct Materials Budget - Year 2
Second
Quarter
Fourth
118,000
Third
Year 3
First
88,000
Fourth
Year
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