CHAPTER 5 PROBLEMS 3. Direct Materials Budget Three ounces of perfume oil are required for each bottle of "Debits," a very popular cologne produced by Thompson Manufacturing for the American Accounting Association. The price of the oil is $1.50 per ounce. Budgeted production of "Debits is given below by quarters for Year 1 and for the first quarter of Year 2. Year 1 2nd 3 4 Year 2 1st 70,000 Quarter Budgeted Production in Bottles 1" 60,000 90,000 150,000 100,000 The perfume oil used in the production has become such a popular ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of the perfume oil at the end of a quarter must be equal to 20% of the following quarter's production needs. There will be 36,000 ounces of perfume oil on hand at the beginning of year 1. A. Prepare a direct materials budget for the perfume oil, by quarter and in total, for DE year 1. At the bottom of your budget, show the amount of purchases in dollars for each quarter and for the year in total. mo bullon buluh 000 dobozorni olyama dobrotowed on how obri voisi olla erinoma dosud nobo bubondo