Exercise $8-3($Algo$)$ Direct Materials Budget $[$LO$8-4]$

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\mathrm{.}20$ per gram. Budgeted production of Mink Caress is given below by quarters for Year $2$ and for the first quarter of Year $3$ :

Year $2$

$\backslash$table$[[,$Year $2,$Year $3],[$Budgeted production, in bottles,First,Second,Third,Fourth,First,,$],[,72,000,102,000,162,000,112,000,82,000,,]]$

The inventory of musk oil at the end of a quarter must be equal to $20\%$ of the following quarter's production needs. Some $43,200$ 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 $2.$

$\backslash$table$[[\backslash$table$[[$Mink Caress$],[$Direct Materials Budget $-$ Year $2],[$First Quarter Second Ouartor$]]],[,$First Quarter,Second Quarter,Third Quarter,Fourth Quarter,Year$],[$Required production in units of finished goods,$72,000,102,000,162,000,112,000,82,000],[$Units of raw materials needed per unit of finished goods,$2,2,2,2,2],[$Units of raw materials needed to meet production,$144,000,204,000,324,000,,164,000],[\backslash$table$[[$Add: Desired units of ending raw materials inventory$],[$Total units of raw materials needed$]]],[\backslash$table$[[$Total units of raw materials needed$],[$Less: Units of beginning raw materials inventory$]],],[\backslash$table$[[$Less: Units of beginning raw materials inventory$],[$Units of raw materials to be purchased$]]],[\backslash$table$[[$Units of raw materials to be purchased$],[$Unit cost of raw materials$]]],[$Unit cost of raw materials,$],[$Cost of raw materials to purchased,,,,,$]]$