201 810-Sp s? D Chapter 8: x :) Files perfect con x \"New Tab Economics × New Ta

Question

201 810-Sp s? D Chapter 8: x :) Files perfect con x "New Tab Economics × New Tab × Hawkes Le × ! ! Hawkes Lee × Ashley × × C ezto.mheducation.com/hm.tpx 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Year 2 First Second Third Fourth 60,000 90,000 150,000 100,000 Year 3 First 70,000 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 36,000 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 purchased

Explanation / Answer

Mink Caress Direct Materials Budget - Year 2 Quarter First Second Third Fourth Year Required production in units of finished goods 60,000 90,000 150,000 100,000 400,000 Units of raw materials needed per unit of finished goods 3 3 3 3 3 Units raw materials needed to meet production 180,000 270,000 450,000 300,000 1,200,000 Ending inventory required 54,000 90,000 60,000 42,000 42,000 Total units of raw materials needed 234,000 360,000 510,000 342,000 1,242,000 Beginning inventory 36,000 54,000 90,000 60,000 36,000 Units of raw materials to be purchased 198,000 306,000 420,000 282,000 1,206,000 Unit Cost of raw materials $1.50 $1.50 $1.50 $1.50 $1.50 Cost of raw materials to purchased $297,000 $459,000 $630,000 $423,000 $1,809,000

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