Question

Four grams of uskoll are required for each bottle of Mink Caless, a very popular perfume made by a small company in western Siberia. The cost of the muskolls $180 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first Quarter of Year 3 Year 3 Year 2 Second Third 124.000 14.000 First ,eee peted production, in bottles Fourth 134. 184, eee Muskoll 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 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 (Round "Unit cost of raw materials" answers to 2 decimal places.) Mink Caress Direct Materials Budget - Year 2 Firat Second I Third 184,000 Fourth 1 34,000 94,000 124,000 535,000 376, 000 4 06,000 730,000 $36.000 2.144,00 Required production in units of finished goods Units of raw materials needed perunt omnished goods Un of www materis needed to meet production Add Desred units of anding raw materials inventory Towards of w ater needed Units of begening raw materials inventory Units of raw materials to be purchased What cost ofw malara Cost of uw materials to purchased

Answer 1

					First	second	third	fourth	QTR
Required production units of finished goods					94,000	124,000	184,000	134,000	536,000
units of raw materials needed per unit of finished goods					4	4	4	4	4
units of raw materials needed to meet production					376000	496000	736000	536000	2144000
Add:desired ending inventory					99200	147200	107200	83200	83200
total units of raw materials needed					475200	643200	843200	619200	2227200
less:Desired beginning inventory					75,200	99200	147200	107200	75,200
materials to be purchased					400,000	544000	696000	512000	2,152,000
cost of materials per gram					1.8	1.8	1.8	1.8	1.8
total cost of materials					720000	979200	1252800	921600	3873600
		for qtr four ending inventory = 94000*2*20%
					75200
			for qtr 1 =		228000*20%=		99200
			for qtr 2 =		348000*20%=		147200
			for Qtr 3=		248000*20%		107200