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 10% 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 10% 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:

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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	fill in the blank e8ea790aefdffed_1	fill in the blank e8ea790aefdffed_2	fill in the blank e8ea790aefdffed_3	fill in the blank e8ea790aefdffed_4
Desired ending inventory	fill in the blank e8ea790aefdffed_5	fill in the blank e8ea790aefdffed_6	fill in the blank e8ea790aefdffed_7	fill in the blank e8ea790aefdffed_8
Needed	fill in the blank e8ea790aefdffed_9	fill in the blank e8ea790aefdffed_10	fill in the blank e8ea790aefdffed_11	fill in the blank e8ea790aefdffed_12
Less: Beginning inventory	fill in the blank e8ea790aefdffed_13	fill in the blank e8ea790aefdffed_14	fill in the blank e8ea790aefdffed_15	fill in the blank e8ea790aefdffed_16
Production	fill in the blank e8ea790aefdffed_17	fill in the blank e8ea790aefdffed_18	fill in the blank e8ea790aefdffed_19	fill in the blank e8ea790aefdffed_20

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Partially correct

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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	fill in the blank 65cb2806ff82f96_1	fill in the blank 65cb2806ff82f96_2	fill in the blank 65cb2806ff82f96_3
Pounds of fruit	fill in the blank 65cb2806ff82f96_4	fill in the blank 65cb2806ff82f96_5	fill in the blank 65cb2806ff82f96_6
Required for production	fill in the blank 65cb2806ff82f96_7	fill in the blank 65cb2806ff82f96_8	fill in the blank 65cb2806ff82f96_9
Desired ending inventory	fill in the blank 65cb2806ff82f96_10	fill in the blank 65cb2806ff82f96_11	fill in the blank 65cb2806ff82f96_12
Total needs	fill in the blank 65cb2806ff82f96_13	fill in the blank 65cb2806ff82f96_14	fill in the blank 65cb2806ff82f96_15
Less: Beginning inventory	fill in the blank 65cb2806ff82f96_16	fill in the blank 65cb2806ff82f96_17	fill in the blank 65cb2806ff82f96_18
Pounds purchased	fill in the blank 65cb2806ff82f96_19	fill in the blank 65cb2806ff82f96_20	fill in the blank 65cb2806ff82f96_21
Small gifts:
Production	fill in the blank 65cb2806ff82f96_22	fill in the blank 65cb2806ff82f96_23	fill in the blank 65cb2806ff82f96_24
Items required	fill in the blank 65cb2806ff82f96_25	fill in the blank 65cb2806ff82f96_26	fill in the blank 65cb2806ff82f96_27
Needed for production	fill in the blank 65cb2806ff82f96_28	fill in the blank 65cb2806ff82f96_29	fill in the blank 65cb2806ff82f96_30
Desired inventory	fill in the blank 65cb2806ff82f96_31	fill in the blank 65cb2806ff82f96_32	fill in the blank 65cb2806ff82f96_33
Total needs	fill in the blank 65cb2806ff82f96_34	fill in the blank 65cb2806ff82f96_35	fill in the blank 65cb2806ff82f96_36
Less: Beginning inventory	fill in the blank 65cb2806ff82f96_37	fill in the blank 65cb2806ff82f96_38	fill in the blank 65cb2806ff82f96_39
Items purchased	fill in the blank 65cb2806ff82f96_40	fill in the blank 65cb2806ff82f96_41	fill in the blank 65cb2806ff82f96_42

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Partially correct

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3. Why do you think there is such a big difference in budgeted units from November to December? Why did Jani budget fewer units in January than in December?

1. December includes the holiday season and is a time when many gifts are given, January is a month of fewer gift giving occasions.
2. December is the last month of the year so Jani has too budget all the balance units in her Annual budget to meet her targets.
3. None of the above.

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Incorrect

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