Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in westernSiberla. The cost of the musk oil is $1.80 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and forthe first quarter of Year 3:Year 3First104,000Year 2ThirdFourthFirst94,000 124,000 184,000 134,000SecondBudgeted production, in bottlesMusk oll has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precautionagainst stock-outs. For this reason, the inventory of musk oill at the end of a quarter must be equal to 20% of the following quarter'sproduction needs. Some 75,200 grams of musk oil will be on hand to start the first quarter of Year 2.Required:Prepare a direct materials budget for musk ol, by quarter and in total, for Year 2.Mink CaressDirect Materials Budget - Year 2QuarterFirstSecondThirdFourthYearUnits of raw materials needed per unit of finished goodsUnits of raw materials needed to meet productionTotal units of raw materials neededUnits of raw materials to be purchasedUnit cost of raw materialsCost of raw materials to purchased

Direct material purchase budget calculates the volume of direct material to purchase along with cost…

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Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter8: Budgeting For Planning And Control

Section: Chapter Questions

Problem 17E: Crescent Company produces stuffed toy animals; one of these is Arabeau the Cow. Each Arabeau takes...

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