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. 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 Small gifts 1 pound 6 items The materials inventory policy is to have 10% of the next month's fruit needs on hand and 35% 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. 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.) 1. Prepare a production budget for September, October, November, and December for gift baskets. (Note: Round all answers to the nearest whole unit.) 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