Exercise 9-36 Production Budget and Direct Materials Purchases Budgets OB Peanut-Fresh Inc. produces all-natural organic peanut butter. The peanut butter is sold in 12-ounce jars. The sales budget for the first four months of the year is as follows: Unit Sales 48,000 46,000 55,000 58,000 Dollar Sales (S) 100,800 96,600 121,000 125,200 January February March April Company policy requires that ending inventories for each month be 20% of next month's sales. At the beginning of January, the inventory of peanut butter is 14,500 jars. Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar. Com- pany policy requires that ending inventories of raw materials for each month be 10% of the next month's production needs. That policy was met on January 1. Required: I. Prepare a production budget for the first quarter of the year. Show the number of jars that should be produced each month as well as for the quarter in total. Prepare separate direct materials purchases budgets for jars and for peanuts for the months of January and February. 2