Production Budget and Direct Materials Purchases BudgetJani 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.MonthUnitSeptember$250$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:MaterialValueFruit$1$ poundSmall gifts$6$ itemsThe 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: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$\text{'}$s Flowers and GiftsProduction Budget for Gift BasketsFor September, October, November, and DecemberLine Item DescriptionSeptemberOctoberNovemberDecemberSalesSales$250$Sales$200$Sales$230$Sales$380$Desired ending inventoryDesired ending inventory$16$Desired ending inventory$18$Desired ending inventory$30$Desired ending inventory$8$NeededNeeded$260$Needed$223$Needed$268$Needed$390$Less: Beginning inventoryLess: Beginning inventory$25$Less: Beginning inventory$20$Less: Beginning inventory$23$Less: Beginning inventory$38$ProductionProduction$245$Production$203$Production$245$Production$352$Feedback AreaFeedbackPartially correctQuestion 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$\text{'}$s Flowers and GiftsDirect Materials Purchases BudgetFor September, October, and NovemberLine Item DescriptionSeptemberOctoberNovemberFruit:ProductionProduction$245$Production$203$Production$241$Pounds of fruitPounds of fruit$1$Pounds of fruit$1$Pounds of fruit$1$Required for productionRequired for production$245$Required for production$203$Required for production$245$Desired ending inventoryDesired ending inventory$20$Desired ending inventory$25$Desired ending inventory$35$Total needsTotal needs$265$Total needs$228$Total needs$280$Less: Beginning inventoryLess: Beginning inventory$25$Less: Beginning inventory$20$Less: Beginning inventory$25$Pounds purchasedPounds purchased$241$Pounds purchased$207$Pounds purchased$256$Small gifts:ProductionProduction$247$ProductionProductionItems requiredItems requiredItems requiredItems requiredNeeded for productionNeeded for productionNeeded for productionNeeded for productionDesired inventoryDesired inventoryDesired inventoryDesired inventoryTotal needsTotal needsTotal needsTotal needsLess: Beginning inventoryLess: Beginning inventoryLess: Beginning inventoryLess: Beginning inventoryItems purchasedItems purchasedItems purchasedItems purchasedFeedback AreaFeedbackPartially correctQuestion Content Area$3.$ 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$\mathrm{.}2.$ 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$\mathrm{.}3.$ None of the above$\mathrm{.}123$