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The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-ofmonth inventory levels must
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-ofmonth inventory levels must equal 10% of the following month's unit sales. The inventory at the end of March was 8,000 units. Required: Prepare a production budget by month and in total, for the second quarter. 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 $1.80 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 75,200 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
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