Exercise 8-3 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 $1.70 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 Fourth 78,000 108,000 168,000 118,000 Year 3 First 88,000 Budgeted 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 31,200 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. (Round "Unit cost of raw materials" answers to 2 decimal places.) Answer is not complete. Mink Caress Direct Materials Budget- Year 2 Quarter First Second Third Fourth Year 78,000108000168,000118,000472,000 2 944,000 Required production in units of finished goods Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Add: Desired units of ending raw materials inventory43,200 67,20047 20035,200 Total 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 2 2 2 2 156,000 216,000 336,000 236,000 99,200 283,200383,200271,2001,136,800 1,2 200 43 200 67 200 47,200 68,000 240,000316,000224,000 948,000 1.70 1.70 S1.70 1.70S1.70 285,600 S 408,000 S 537,200 S 380,800 S1,611,600