Business, 12.08.2020 06:01 johnsonkia873

Direct Materials Budget [LO8-4] 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 $1.70 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 Year 3
First Second Third Fourth First
Budgeted production, in bottles 92,000 122,000 182,000 132,000 102,000
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 31,200 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.)

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Direct Materials Budget [LO8-4] Four grams of musk oil are required for each bottle of Mink Caress,...

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