3. Three grams of musk oil are required for each botte of Mink Caress, a very po

Question

3. Three grams of musk oil are required for each botte of Mink Caress, a very popular perfume made by a small company in western Siberia. 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 for the frst quarter of Year 3 First 66,000 96,000 156,000 106,000 First 76,000 Third Fourth Budgeted production, in bottles Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large nventories 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 39,600 grams of musk 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 purchased

Explanation / Answer

Direct material budget :

First quarter second quarter Third quarter Fourth quarter Year Production units 66000 96000 156000 106000 424000 Raw material per unit 3 3 3 3 3 Raw material for production 198000 288000 468000 318000 1272000 Add: Desired ending inventory 57600 93600 63600 45600 45600 Total 255600 381600 531600 363600 1317600 Less: Beginning inventory -39600 -57600 -93600 -63600 -39600 Raw material purchased 216000 324000 438000 300000 1278000 Cost per pound 1.8 1.8 1.8 1.8 1.8 Raw material purchase cost 388800 583200 788400 540000 2300400

Related Questions

Navigate

• Browse (All)
• Browse 3
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.