Three grams of musk oil are required for each bottle of Mink Caress, a very popu
ID: 2563515 • Letter: T
Question
Three 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 $2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First Second Third 72,000 102,000 162,000 112,000 First 82,000 Fourth Budgeted production, in bottles Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 43,200 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. (Round "Unit cost of raw materials" answers to 2 decimal places.) Mink Caress Direct Materials Budget- Year 2 Quarter First Second Third Fourth Year 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 Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchasedExplanation / Answer
Dear Student Thank you for using Chegg Please find below the answer and please give thumbs up Statementshowing Computations Direct Materials Budget Paticulars First Quarter Second Quarter Third Quarter Fourth Quarter Year First Q Year 3 Required production in units of finished goods 72,000.00 102,000.00 162,000.00 112,000.00 448,000.00 82,000.00 Units of raw materials needed per unit of finished goods 3.00 3.00 3.00 3.00 3.00 3.00 Units of raw materials needed to meet production 216,000.00 306,000.00 486,000.00 336,000.00 1,344,000.00 246,000.00 Ending Raw Materials = 20% of next Q prod 61,200.00 97,200.00 67,200.00 49,200.00 Total Unit of raw materials needed 277,200.00 403,200.00 553,200.00 385,200.00 Beginning raw materials = Ending Raw Material of prev Q 43,200.00 61,200.00 97,200.00 67,200.00 Units of raw materials to be purchased 234,000.00 342,000.00 456,000.00 318,000.00 Unit cost of raw materials 2.20 2.20 2.20 2.20 Cost of raw materials to be purchased 514,800.00 752,400.00 1,003,200.00 699,600.00