Exercise 8-3 (Algo) Direct Materials Budget (L08-4) Four grams of musk oil are required for coch bottle of Mink Caress, a very popular perfume made by a small company in western Siberia. The cost of the muskoll is $1.90 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 96,000 126,000 186,000 136,000 106,000 The inventory of muskoll at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 76,800 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 Required production in units of finished goods Units of raw materials nooded per unit of finished goods Units of raw materials needed to meet production Add: Desired units of ending raw materials inventory Totat units of raw materials needed 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 Mink Caress Direct Materials Budget - Year 2 First Quarter Second Quarter Third Quarter Fourth Quarter Year 16,000 120,000 180,000 136.000 544,000 4 4 4 4 384,000 504,000 744,000 544,000 2,176,000 100.800 148.000 103,800 84,800 442,400 484,800 652,800 852,800 628,800 2,618,400 76.800 100,800 148,800 108,800 435 200 408.000 552.000 704,000 520,000 2.183 200 $ 1.90 $ 1.907 s 1.90 $ 1.90s 1.90 $ 775.200 $ 1,048,800 $ 1,337,6003 988,000 $4,148,080