# Four grams of musk oil are required for each bottle of Mink Caress- a (1).docx

8 de Feb de 2023
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### Four grams of musk oil are required for each bottle of Mink Caress- a (1).docx

• 1. 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 \$2.20 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 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 reason, the inventory of musk oil at the end of a quarter must be equal to 30% of the following quarter 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 \$2.20 per gram. Budgeted production of Mink Caress is given below by quarters for Year 2 and for the first quarter of Year 3: Solution Statement of Quarterly Musk oil Budget for Year 2 Quarter-1 Quarter-2 Quarter-3 Quarter-4 Total Budgeted No of Bottle of Production 100,000.00 130,000.00 190,000.00 140,000.00 560,000.00 Issue to Production @4gram per bottol 400,000.00 520,000.00 760,000.00 560,000.00 2,240,000.00 Ending Musk oil Inventory 30% of next months production requirements 156,000.00 228,000.00 168,000.00 132,000.00 132,000.00 Total Avail Musk oil for production 556,000.00 748,000.00 928,000.00 692,000.00 2,372,000.00 Less: Beginning Musk oil inventory 80,000.00 156,000.00 228,000.00 168,000.00 80,000.00 Budgeted Purchase of Mask oil (in gram) 476,000.00 592,000.00 700,000.00 524,000.00 2,292,000.00 Budgeted Purchase of Mask oil @\$2.2 per gram \$1,047,200.00 \$1,302,400.00 \$1,540,000.00 \$1,152,800.00 \$5,042,400.00