Question

In: Accounting

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

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:

Year 2 Year 3
First Second Third Fourth First
Budgeted production, in bottles 64,000 94,000 154,000 104,000 74,000

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.

Solutions

Expert Solution

Solution:

Direct Material Budget
For the Quarter Ended and Year Ended
Quarter Year
1 2 3 4
Direct material Needed for Production 192000 282000 462000 312000
Add: Desired Ending Direct Material 56400 92400 62400 14800
Total Required Units 248400 374400 524400 326800
Less: Beginning Direct Material 38400 56400 92400 62400
Direct Material Purchases[a] 210000 318000 432000 264400 1224400
Cost per Kilogram [b] $              1.70 $          1.70 $            1.70 $             1.70 $             1.70
Cost of direct material purchases[a*b] $       357,000 $   540,600 $     734,400 $      449,480 $   2,081,480

Related Solutions

Three grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $2.10 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 70,000 100,000 160,000 110,000 80,000 Musk oil has become so popular...
Three grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $1.80 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 66,000 96,000 156,000 106,000 76,000          Musk oil has become...
Three grams of musk oil are required for each bottle of Mink Caress, a very popular...
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: Year 2 Year 3 First Second Third Fourth First Budgeted production, in bottles 64,000 94,000 154,000 104,000 74,000 Musk oil has become so popular...
Three grams of musk oil are required for each bottle of Mink Caress, a very popular...
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. Budgeted production in bottles First second third fourth first (year 3) 60,000 90,000 150,000 100,000 70,000 Musk oil has become so popular as a...
Two grams of musk oil are required for each bottle of Mink Caress, a very popular...
Two 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 $2.10 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 84,000 114,000 174,000 124,000...
Four grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $1.50 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 88,000 118,000 178,000 128,000 98,000 Musk oil has become so popular...
Four grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $1.60 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 90,000 120,000 180,000 130,000 100,000 Musk oil has become so popular...
Four grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $2.10 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 98,000 128,000 188,000 138,000 108,000 Musk oil has become so popular...
Four grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $1.60 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 90,000 120,000 180,000 130,000 100,000 Musk oil has become so popular...
Four grams of musk oil are required for each bottle of Mink Caress, a very popular...
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 $2.10 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 98,000 128,000 188,000 138,000 108,000 Musk oil has become so popular...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT