C Secure https// tml 2 Four grams of musk oil are required for each bottle of Mi

Question

C Secure https// tml 2 Four 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 $1.90 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3. 3.33 Year 2 First Second Third Fourth Year 3 ted 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 quarters production needs. Some 76.800 grams of musk oil will be on hand to start the first quarter of Year 2 HitRequired: Prepare a direct decimal places.) als budget for musk oil. by quarter and in total, for Year 2. (Round "Unit cost of raw materials" answers to 2 Units of raw m 0 to be O Type here to search

Explanation / Answer

RAW MATERIAL PURCHASE BUDGET Q1 Q2 Q3 Q4 TOTAL Q1 Year3 Budgeted Production units 96,000 126,000 186,000 136,000 544,000 106,000 Raw material required per unit 4 4 4 4 4 4 Total Production requiremennt 384,000 504,000 744,000 544,000 2,176,000 424,000 Add: Desired Ending Inventory 100,800 148,800 108,800 84,800 84,800 Total needs 484,800 652,800 852,800 628,800 2,260,800 Less: Beginning Inventory 76,800 100,800 148,800 108,800 76,800 Purchase Units 408,000 552,000 704,000 520,000 2,184,000 Cost price per unit 1.90 1.90 1.90 1.90 1.90 Budgeted Purchase in $ 775,200 1,048,800 1,337,600 988,000 4,149,600

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