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 $1.70 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: First 64,000 Year 2 second third Fourth 94,000 154,000 104,000 Year 3 First 74,000 Budgeted production, in bottles 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 38,400 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 Quarter First Second Third Required production in units of finished goods 64,000 94,000 1 54,000 Units of raw materials needed per unit of finished goods 3 3 3 Units of raw materials needed to meet production 192,000 282,000 462,000 X Total units of raw materials needed 248,400 374,400 524,400 Fourth 104,000 3 312,000 Year 416,000 3 1,248,000 356,400 1,503,600 % Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased $ $ 210,000 1.70 357,000 $ $ 318,000 1.70 540,600 $ $ 432,000 1.70 734,400 $ $ 294,000 1.70 499,800 1,254,000 $ 1.70 $ 2,131,800