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 9% 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 9% of the next month's fruit needs on hand and 45% 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:

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 5b8b8efe302f062_1	fill in the blank 5b8b8efe302f062_2	fill in the blank 5b8b8efe302f062_3	fill in the blank 5b8b8efe302f062_4
Desired ending inventory	fill in the blank 5b8b8efe302f062_5	fill in the blank 5b8b8efe302f062_6	fill in the blank 5b8b8efe302f062_7	fill in the blank 5b8b8efe302f062_8
Needed	fill in the blank 5b8b8efe302f062_9	fill in the blank 5b8b8efe302f062_10	fill in the blank 5b8b8efe302f062_11	fill in the blank 5b8b8efe302f062_12
Less: Beginning inventory	fill in the blank 5b8b8efe302f062_13	fill in the blank 5b8b8efe302f062_14	fill in the blank 5b8b8efe302f062_15	fill in the blank 5b8b8efe302f062_16
Production	fill in the blank 5b8b8efe302f062_17	fill in the blank 5b8b8efe302f062_18	fill in the blank 5b8b8efe302f062_19	fill in the blank 5b8b8efe302f062_20

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 037a27fdcf88004_1	fill in the blank 037a27fdcf88004_2	fill in the blank 037a27fdcf88004_3
Pounds of fruit	fill in the blank 037a27fdcf88004_4	fill in the blank 037a27fdcf88004_5	fill in the blank 037a27fdcf88004_6
Required for production	fill in the blank 037a27fdcf88004_7	fill in the blank 037a27fdcf88004_8	fill in the blank 037a27fdcf88004_9
Desired ending inventory	fill in the blank 037a27fdcf88004_10	fill in the blank 037a27fdcf88004_11	fill in the blank 037a27fdcf88004_12
Total needs	fill in the blank 037a27fdcf88004_13	fill in the blank 037a27fdcf88004_14	fill in the blank 037a27fdcf88004_15
Less: Beginning inventory	fill in the blank 037a27fdcf88004_16	fill in the blank 037a27fdcf88004_17	fill in the blank 037a27fdcf88004_18
Pounds purchased	fill in the blank 037a27fdcf88004_19	fill in the blank 037a27fdcf88004_20	fill in the blank 037a27fdcf88004_21
Small gifts:
Production	fill in the blank 037a27fdcf88004_22	fill in the blank 037a27fdcf88004_23	fill in the blank 037a27fdcf88004_24
Items required	fill in the blank 037a27fdcf88004_25	fill in the blank 037a27fdcf88004_26	fill in the blank 037a27fdcf88004_27
Needed for production	fill in the blank 037a27fdcf88004_28	fill in the blank 037a27fdcf88004_29	fill in the blank 037a27fdcf88004_30
Desired inventory	fill in the blank 037a27fdcf88004_31	fill in the blank 037a27fdcf88004_32	fill in the blank 037a27fdcf88004_33
Total needs	fill in the blank 037a27fdcf88004_34	fill in the blank 037a27fdcf88004_35	fill in the blank 037a27fdcf88004_36
Less: Beginning inventory	fill in the blank 037a27fdcf88004_37	fill in the blank 037a27fdcf88004_38	fill in the blank 037a27fdcf88004_39
Items purchased	fill in the blank 037a27fdcf88004_40	fill in the blank 037a27fdcf88004_41	fill in the blank 037a27fdcf88004_42

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.