Preparing a Materials Purchases Budget

Three grams of musk oil are required for each bottle of Mink Caress, a popular perfume made by a small company in western Siberia. (Siberia is located in Russia, whose currency is the rouble.) The cost of the musk oil is 150 roubles per gram. Budgeted production figures of Mink Caress follow by quarters for year 2 and for the first quarter of year 3:

		Year 2 Quarter			Year 3 Quarter
	1	2	3	4	1
Budgeted production, in bottles	60,000	90,000	150,000	100,000	70,000

Musk oil has become so popular as a perfume base that it has become necessary to carry large inventories as a precaution against stock depletion. For this reason, the inventory of musk oil at the end of a quarter must be equal to 20% of the following quarters production needs. Some 36,000 grams of musk oil will be on hand to start the first quarter of year 2.

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Required:

Prepare a materials purchases budget for musk oil, by quarter and in total, for year 2. At the bottom of your budget, show the amount of purchases in roubles for each quarter and for the year in total.

Materials Purchases Budget
	Year 2					Year 3
	First	Second	Third	Fourth		First
Required production in bottles..........
Number of grams, per bottle.............
Total production needsgrams.........

	Year 2
	First	Second	Third	Fourth		Year
Production needsgrams (above)...................
Add desired ending inventorygrams..............
Total needsgrams........................................
Less beginning inventorygrams....................
Raw materials to be purchasedgrams...........
Cost of raw materials to be purchased at 150 roubles per gram (in thousands of roubles)..