Peanut Land 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 Dollar Sales ($) January 40,000 72,000 February 85,000 153,000 March 50,000 90,000 April 58,000 104,400 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 38,000 jars. Each jar of peanut butter needs two raw materials:

1. 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.

Peanut Land Inc. Production Budget For the First Quarter of the Year

	January	February	March	Total
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

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2. Prepare a direct materials purchases budget for jars for the months of January and February.

Peanut Land Inc. Direct Materials Purchases Budget for Jars For January and February

	January	February	Total
Production
Jar
Jars for production
Desired ending inventory
Total needs
Less: Beginning inventory
Jars purchased

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Prepare a direct materials purchases budget for peanuts for the months of January and February.

Peanut Land Inc. Direct Materials Purchases Budget for Peanuts For January and February

	January	February	Total
Production
Ounces
Ounces for production
Desired ending inventory
Total needs
Less: Beginning inventory
Ounces purchased