gg Study l Guided Solutio ×\"G value 10.00 Points The Produ ×YM Chapter 8 homewo

Question

gg Study l Guided Solutio ×"G value 10.00 Points The Produ ×YM Chapter 8 homework The Production Manager Caress, a very popular perfume made by a Three grams of musk ol are required for each bottle of Mink sm all company in western Steria. The cost of the muskoi is $190 per gram. Budgeted production of Mink Caress is given below by quaters for Year 2 and for the first quarter of Year 3 Year 2 First Second Third Fourth 68,000 98,000 158,000 108,000 First 78,000 Budgeted production, in bottles Musk oil has become so popular as a perfume ingredient that it has become necessary to carry large invetories as a precaution against stock-outs. For this reason, the inventory of musk ail at the end of a quaner must be equal to 20% of the following quarter's proaction needs. Some 40 800 grams of musk oil will be on hand to start the frst quarter of Year 2 Prepare a direct materiais budget for musk on, 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 Required production in units of Snished goods Units of raw materials needed per unt of finished goods Units of raw materials needed to meet production Total unts of raw materials needed Units of raw materiais to be purchased it cost of raw materials Cost of raw materials to purchased Hints References Book& Resources 4

Explanation / Answer

Direct material budget :

Quarter Year Required production in units of finished goods 68000 98000 158000 108000 432000 Units of raw material needed per unit of finished goods 3 3 3 3 3 Units of raw materials needed to meet production 204000 294000 474000 324000 1296000 Add: Desired ending inventory 58800 94800 64800 46800 46800 Total units of raw materials needed 262800 388800 538800 370800 1342800 Less: Beginning raw material (40800) (58800) (94800) (64800) (40800) Units of raw material to be purchased 222000 330000 444000 306000 1302000 Unit cost of raw material 1.90 1.90 1.90 1.90 1.90 Cost of the raw materials to purchased 421800 627000 843600 581400 2473800

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