Question

Check my work 3 Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in westem Siberia. The cost of the musk oil is $210 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: 10 points First 98,000 Year 2 Second Third 128,000 188,000 Fourth 138,000 Year 3 First 108,000 Budgeted production, in bottles eBook 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 78,400 grams of musk oil will be on hand to start the first quarter of Year 2 Print References Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2 Third Mink Caress Direct Materials Budget - Year 2 Quarter First Second Required production in units of finished goods 490,000 640.000 Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Fourth 690.000 Year 540.000 940.000 Prey 3 of 8 Next >

Answer 1

Mink Caress

Direct Materials Budget - Year 2

	First	Second	Third	Fourth	Year
Required production in units of finished goods	98,000	128,000	188,000	138,000	552,000
Units of raw material needed per unit of finished goods	4	4	4	4	4
Units of raw materials needed to meet production	392,000	512,000	752,000	552,000	2,208,000
Desired ending inventory of raw materials	102,400 (512,000*20%)	150,400 (752,000*20%)	110,400 (552,000*20%)	86,400 (108,000*4*20%)	86,400
Total units of raw materials needed	494,400	662,400	862,400	638,400	2,294,400
Beginning inventory of raw materials	(78,400)	(102,400)	(150,400)	(110,400)	(78,400)
Units of raw materials to be purchased	416,000	560,000	712,000	528,000	2,216,000
Unit cost of raw materials	$2.1	$2.1	$2.1	$2.1	$2.1
Cost of raw materials to purchased	$873,600	$1,176,000	$1,495,200	$1,108,800	$4,653,600