UD15 DOLL LLLUC 5 COL PEOPLE PIE LU11 U5UL01 EXERCISE 8-3 Direct Materials Budget LO8-40 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 First Second Third Fourth 60,000 90,000 150,000 100,000 Year 3 First 70,000 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 Page 368 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: Using Schedule 3Q as your guide, prepare a direct materials budget for musk oil, by quarter and in total, for Year 2