Exercise $8-3($Algo$)$ Direct Materials Budget $[$LO$8-4]$

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\mathrm{.}60$ per gram. Budgeted production of Mink Caress is given below by quarters for Year $2$ and for

the first quarter of Year $3$:

The inventory of musk oil at the end of a quarter must be equal to $20\%$ of the following quarter's production needs. Some $72,000$

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 $2.$