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 | ||
The inventory of musk oil at the end of a quarter must be equal to 20% of the following quarter’s production needs. Some 42,000 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.
Answer-:
Direct material budget can be prepared as follows-
Please give a thumbs up.
Thankyou...........
Get Answers For Free
Most questions answered within 1 hours.