Down Under Products, Limited of Australia has budgeted sales of its popular boomerang for the next four months as follows: 52,000 Unit Sales April May June July 75,000 92,000 81,000 The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of- month inventory levels must equal 15% of the following month's unit sales. The inventory at the end of March was 7,800 units. Required: Prepare a production budget by month and in total, for the second quarter. Budgeted unit sales Total needs Required production in units Down Under Products, Limited Production Budget April May June Quarter 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 $1.50 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Budgeted production, in bottles First 88,000 Year 2 Second 118,000 Third 178,000 Fourth 128,000 Year 3 First 98,000 The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 70,400 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. Mink Caress Direct Materials Budget - Year 2 Quarter Year First Second Third Fourth 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