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Exercise 8-3 Direct Materials Budget (L08-4) Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by

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Exercise 8-3 Direct Materials Budget (L08-4) Three 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: Year 2 First Second third Youth 60.000 90.000 150.000 100.000 Year First 70,000 Dudgeted production in bottles Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 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. Answer is not complete. Mink Caress Direct Materials Budget - Year 2 Quarter Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of Year 2 Required: Prepare a direct materials budget for muskoll, by quarter and in total, for Year 2 Answer is not complete. OO Mink Cars Direct Materials Budget Year 2 Quarter Second Third Fourth Year Required production in units of finished goods 60,000 0000 150.000 100 000 400,000 Units of raw materials needed per unit of finished goods 3 Units of raw materials needed to meet production 180,000 270.000 450.000 300,000 1.200.000 Add: Desired units of ending raw materials inventory 54,000 90.000 60.000 42,000 Total units of raw materiais needed 234.000 360.000 510.000 342.000 1,446,000 Less: Units of beginning raw materials inventory 36,000 54000 DODO 60.000 Units of raw materials to be purchased 198,000 306.000 420.000 282.000 1.200.000 Unit cost of raw materials s 1.50s 1.50 $ 1.503 1505 150 $ 297.000 $ 459 000 $423000 $630,000 Cost of raw materials to purchased $ 1.800.000 S

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