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 westenn Siberia. The cost of the musk oil s $1.70 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and fo the first quarter of Year 3: Year 2 First Second Third Fourth Year 3 Fir 88,000 Budgeted production, in bottles 78,000 108,000 168,000 118,000 Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 31,200 grams of musk oil will be on hand to start the first quarter of Year 2. Required Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. (Round "Unit cost of raw materials" answers to 2 decimal places.) Quarter Second Third Fourth Required in units of 156,000 216,000 236,000 944,000 be equal to 20% of the following qua stock-outs. For this reason, the inventory of musk oil at the end of a quarter must production needs. Some 31,.200 grams of musk oil will be on hand to start the first quarter of Year 2. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2. (Round "Unit cost decimal places.) of raw materials" answer Mink Caress Direct Materials Budget- Year 2 Quarter First Second Third Fourth Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Add: Desired units of ending raw materials inventory 2 156,000 216,000 336,000 236,000944,000 0 31,200 31.200 0 | 124,800 ) 172,800. 268,800 | 188.800 755.2000 0 31,200 168,000 240,000 316,000224,000948,000 1.70 1.70$ 1.70s 1.70$ 1.70 s 285,600 408,000 537,200 380,800 1,611,600 Units of raw materials to be purchased Unit cost of raw materials