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Four grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by a small company in western Siberia.

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Four 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 $1.60 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 Year 3 First 90,000 Second 120,000 Third 180,000 First 100,000 Fourth Budgeted production, in bottles 130,000 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 72,000 grams of musk oil will be on hand to start the first quarter of Year 2. t 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.) Mink Caress Direct Materials Budget- Year 2 Quarter Third First Second Fourth Year Required production in units of finished goods 90,000 120,000 520,000 180,000 130,000 Units of raw materials needed per unit of finished goods 4 4 4 4 4 Units of raw materials needed to meet production 480,000 360,000 720,000 520,000 2,080,000 Add: Desired units of ending raw materials inventory 96,000 144,000 104.000 80,000 80,000 Total units of raw materials needed 456,000 624,000 824,000 600,000 Less: Units of beginning raw materials inventory 72,000 96,000 144,000 (72,000) 104.000 Units of raw materials to be purchased 528,000 384,000 680,000 496,000 2,088,000 Unit cost of raw materials 1.60 $ 614.400 $ 1.60 $ 1.60 1.60 1,60 Cost of raw materials to purchased $ 844,800 $ 3,340,800 1,088,000 793,600

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