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 3 Year 2 Second Third 120,000 180,000 First 90,000 Budgeted production, in bottles Fourth 130,000 First 100,000 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. Required: Prepare a direct materials budget for musk oil, by quarter and in total, for Year 2 Mink Caress Direct Materials Budget - Year 2 First Quarter Second Third Fourth Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased In a flexible budget, what will happen to foed costs as the activity level increases? Multiple Choice The foed cost per unit will decrease The foed cost per unit will remain unchanged O The foxed cost per unit will increase O O Foxed costs are not included in a fexible budget O <. prex of when using a flexible budget decrease in activity within the relevant range: multiple choice decreases variable cost per unit. increases total costs that is based on actual period known as a: continuous . static master budget. prev>