Business, 21.03.2020 03:06 chaseashley24

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

Year 3

First Second Third Fourth First
Budgeted production, in bottles 60,000 90,000 150,000 100,000 70,000

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 36,000 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.)

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Three grams of musk oil are required for each bottle of Mink Caress, a very popular perfume made by...

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