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

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Accounting

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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 $190 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3 : 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 teason, the inventory of musk oll at the end of a quarter must be equal to 20% of the following quarter's production needs. Some 76,800 grams of musk oll will be on hand to start the first quarter of Year 2 Required: Prepare a direct materials buoget for musk oil, by quarter and in total, for Year 2

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