Chapter 08 Homework 0 Saved m. Exercise 8-3 (Algo) Direct Materials Budget (LO8-4] 10 points 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 $1.60 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 Second Third 92,000 152,000 First 62,000 Budgeted production, in bottles Year 3 First 72,000 Fourth 102,000 eBook Hint 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 37,200 grams of musk oil will be on hand to start the first quarter of Year 2. References 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.) Year Mink Caress Direct Materials Budget - Year 2 Quarter First Second Third Fourth Required production in units of finished goods 62,000 92,000 152,000 102,000 Units of raw materials needed per unit of finished goods 186,000 216,000 456,000 306,000 Units of raw materials needed to meet production 11,532,000,000 19,872,000,000 69,312,000,000 31,212,000,000 Add: Desired units of ending raw materials inventory 37,200 43,200 91.200 61,200 Total units of raw materials needed 229,200 307.200 517.200 349,200 Less: Units of beginning raw materials inventory Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased