Production Budget and Direct Materials Purchases Budget

Raylene Webber, owner of Raylene'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 colourful

cellophane. Raylene has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year.

Raylene likes to have $8\%$ 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 $1$ kilogram

Small gifts $,6$ items

The materials inventory policy is to have $8\%$ 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:

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

$2.$ 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.$)$