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Down Under Products, Ltd., of Australia has budgeted sales of its popular boomerang for the next four months as follows: April May Unit Sales 88,000 90,000 128,000 99,000 June July The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of- month inventory levels must equal 15% of the following month's unit sales. The inventory at the end of March was 13,200 units. Required: Prepare a production budget by month and in total, for the second quarter. Down Under Products, Ltd., Production Budget April May June Quarter Budgeted units sales Total needs Required production in units 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 $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: First 78,000 Year 2 Second Third Fourth 108,000 168,000 118,000 Year 3 First 88,000 Budgeted production, in bottles 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 31,200 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. (Round "Unit cost of raw materials" answers to 2 decimal places.) Mink Caress Direct Materials Budget - Year 2 Quarter First Second Third Fourth Year Units of raw materials needed per unit of finished goods Units of raw materials needed to meet production Total units of raw materials needed Units of raw materials to be purchased Unit cost of raw materials Cost of raw materials to purchased

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