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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 $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and the first quarter of Year 3: First 76,000 Year 2 Second 106,000 First Third 166,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Mink Caress Direct Materials Budget - 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 30,400 grams of musk oil will be on hand to start the first quarter of Year 2. Second Quarter Fourth 116,000 Third Year 3 First 86,000 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 oil is $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and the first quarter of Year 3: First 76,000 Year 2 Second 106,000 First Third 166,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. Mink Caress Direct Materials Budget - 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 30,400 grams of musk oil will be on hand to start the first quarter of Year 2. Second Quarter Fourth 116,000 Third Year 3 First 86,000 Fourth Year

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 76,000 Required production in units of finished goods Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Add: Desired units of ending raw materials inventory Total units of raw materials needed Less: Units of beginning raw materials inventory Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Second 106,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. First 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 30,400 grams of musk oil will be on hand to start the first quarter of Year 2. Mink Caress Direct Materials Budget - Year 2 76,000 2 Third 166,000 152,000 Second Quarter 106,000 2 212,000 Fourth 116,000 Third 166,000 2 332,000 Year 3 First 86,000 Fourth 116,000 2 232,000 Year 464,000 2 928,000
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 $1.60 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 76,000 Required production in units of finished goods Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Add: Desired units of ending raw materials inventory Total units of raw materials needed Less: Units of beginning raw materials inventory Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Second 106,000 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. First 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 30,400 grams of musk oil will be on hand to start the first quarter of Year 2. Mink Caress Direct Materials Budget - Year 2 76,000 2 Third 166,000 152,000 Second Quarter 106,000 2 212,000 Fourth 116,000 Third 166,000 2 332,000 Year 3 First 86,000 Fourth 116,000 2 232,000 Year 464,000 2 928,000
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