Exercise 8-3 (Algo) Direct Materials Budget [LO8-4] Two 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 $1.90 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. Year 2 First 82,000 Second 112,000 Third 172,000 Fourth 122,000 Year 3 First 92,000 The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 32,800 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. Answer is not complete. Mink Caress Direct Materials Budget - Year 2 Quarter Year First Second Third Fourth Required production in units of finished goods 82,000 112,000 172,000 122,000 488,000 Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production 2 2 2 2 2 164,000 224,000 344,000 244,000 976,000 Add: Desired units of ending raw materials inventory 44,800 68,800 48,800 36,800 Total units of raw materials needed 208,800 292,800 392,800 280,800 Less: Units of beginning raw materials inventory 32,800 44,800 68,800 48,800 Units of raw materials to be purchased 176,000 248,000 324,000 232,000 Unit cost of raw materials $ 1.90 1.90 $ 1.90 $ 1.90 $ 1.90 Cost of raw materials to purchased $ 334,400 $ 471,200 $ 615,600 $ 440,800