Exercise 8-3 (Static) 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 $1.50 per gram Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Budgeted production, in bottles Fiest 68,000 Year 2 Second Third Fourth 90,000 150,000 100.000 Year First 70,000 The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 36.000 grams of musk oil will be on hand to start the first quarter of Year 2 Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2 Fourth 100,000 Your 400.000 Mink Caress Direct Materials Budget Year 2 Quarter First Second Required production in units of finished goods 50.000 90,000 Units of raw materials needed per unit of finished goods 3 Units of raw materials needed to meet production 180 000 270.000 54000 90.000 Total units of raw materials needed 234000 350.000 36,000 54.000 Units of raw materials to be purchased 193.000 306.000 Unit cost of raw materials 5 1.50$ 150 s Cast of raw materials to purchased $ 297.000 5 459.000 5 Thied 150,000 3 450,000 60,000 510.000 90,000 420.000 150 s 630.000 5 300,000 1.200.000 140.000 140.000 314,000 12.140,000 600.000 35 000 254 000 11.780.000 1 50 5 150 381,000 5 17.570.000