Three 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: Budgeted production, in bottles Year 2 Year 3 First 64,000 Second 94,000 Third 154,000 Fourth 104,000 First 74,000 The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 38,400 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. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 First Quarter Year Second Third Fourth
Three 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: Budgeted production, in bottles Year 2 Year 3 First 64,000 Second 94,000 Third 154,000 Fourth 104,000 First 74,000 The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 38,400 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. Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased Mink Caress Direct Materials Budget - Year 2 First Quarter Year Second Third Fourth
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 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:
Budgeted production, in bottles
Year 2
First
64,000
Second
94,000
Third
154,000
Fourth
104,000
Year 3
First
74,000
The inventory of musk oil at the end of a quarter must equal 20% of the following quarter's production needs. A total of 38,400 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.
Units of raw materials needed per unit of finished goods
Units of raw materials needed to meet production
Total units of raw materials needed
Units of raw materials to be purchased
Unit cost of raw materials
Cost of raw materials to purchased
Mink Caress
Direct Materials Budget - Year 2
First
Quarter
Year
Second
Third
Fourth
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