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 $1.80 per gram. budgeted production of mink caress is given below by quarters for year 2 and for the first quarter of year 3:

Cost of raw material to be purchased  for the four quarters of Year 2 is:

Quarter 1: $720,000

Quarter 2: $979,200

Quarter 3: $1,252,800

Quarter 4: $921,600

Total year: $3,873,600

Explanation:

Key explanations:

Units of raw material needed to meet production (A*B)  =

Required production in units of finished goods (A) × Units of raw material needed per unit of finished goods (B)

So, for example for year 1: 94,000 × 4 = 376,000, same goes for other quarters.

Total raw material units needed are achieved by adding the ending inventory to units of raw material needed to meet production.

Ending inventory = 20% of the following quarter,

therefore, ending inventory for Quarter 1 = 496,000 × 20% = 99,200

Similarly, ending inventory of 1 quarter is the opening inventory of the other quarter, therefore, 99,200 ending inventory of quarter 1, is the opening inventory of quarter 2.

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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