Production Budget and Direct Materials Purchases Budget

Jani Subramanian, owner of Jani's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Jani has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year.

September	250
October	200
November	230
December	380
January	100

Jani likes to have 5% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31.

Two materials are needed for each fruit basket:

Fruit	1 pound
Small gifts	6 items

The materials inventory policy is to have 5% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amount for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy.

Required:

Question Content Area

1. Prepare a production budget for September, October, November, and December for gift baskets. (Note: Round all answers to the nearest whole unit.)

Jani's Flowers and Gifts Production Budget for Gift Baskets For September, October, November, and December

	September	October	November	December
Sales	###	###	###	###
Desired ending inventory	###	###	###	###
Needed	###	###	###	###
Less: Beginning inventory	###	###	###	###
Production	###	###	###	###

Question Content Area

2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November. (Note: Round answers to the nearest whole unit.)

Jani's Flowers and Gifts Direct Materials Purchases Budget For September, October, and November

Fruit:	September	October	November
Production	###	###	###
Pounds of fruit	###	###	###
Required for production	###	###	###
Desired ending inventory	###	###	###
Total needs	###	###	###
Less: Beginning inventory	###	###	###
Pounds purchased	###	###	###
Small gifts:
Production	###	###	###
Items required	###	###	###
Needed for production	###	###	###
Desired inventory	###	###	###
Total needs	###	###	###
Less: Beginning inventory	###	###	###
Items purchased	###	###	###