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Please do all parts of this problem. Thank you. Three grams of musk oil are required for each bottle of Mink Caress, a very popular
Please do all parts of this problem. Thank you.
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: Year 2 Second Third 90,000 150,000 First 60,000 Budgeted Production, in bottles Year 3 First 70,000 Fourth 100,000 Musk oil has become so popular as a perfume ingredient that is 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 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. At the bottom of your budget, show the amount of purchases for each quarter and for the year in totalStep by Step Solution
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