Production Budget and Direct Materials Purchases Budgets

Peanut Land Inc. produces all-natural organic peanut butter. The peanut butter is sold in 12-ounce jars. The sales budget for the first four months of the year is as follows:

	Unit Sales	Dollar Sales ($)
January	40,000	88,000
February	60,000	132,000
March	70,000	154,000
April	62,000	136,400

Company policy requires that ending inventories for each month be 10% of next month's sales. At the beginning of January, the inventory of peanut butter is 32,000 jars. Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar. Company policy requires that ending inventories of raw materials for each month be 20% of the next month's production needs. That policy was met on January 1.

Required:

1. Prepare a production budget for the first quarter of the year. Show the number of jars that should be produced each month as well as for the quarter in total.

Peanut Land Inc.
Production Budget
For the First Quarter of the Year
	January	February	March	Total
Sales	fill in the blank 90a96df8b031067_1	fill in the blank 90a96df8b031067_2	fill in the blank 90a96df8b031067_3	fill in the blank 90a96df8b031067_4
Desired ending inventory	fill in the blank 90a96df8b031067_5	fill in the blank 90a96df8b031067_6	fill in the blank 90a96df8b031067_7	fill in the blank 90a96df8b031067_8
Total needs	fill in the blank 90a96df8b031067_9	fill in the blank 90a96df8b031067_10	fill in the blank 90a96df8b031067_11	fill in the blank 90a96df8b031067_12
Less: Beginning inventory	fill in the blank 90a96df8b031067_13	fill in the blank 90a96df8b031067_14	fill in the blank 90a96df8b031067_15	fill in the blank 90a96df8b031067_16
Units produced	fill in the blank 90a96df8b031067_17	fill in the blank 90a96df8b031067_18	fill in the blank 90a96df8b031067_19	fill in the blank 90a96df8b031067_20

2. Prepare a direct materials purchases budget for jars for the months of January and February.

Peanut Land Inc.
Direct Materials Purchases Budget for Jars
For January and February
	January	February	Total
Production	fill in the blank 6e8479094027fca_1	fill in the blank 6e8479094027fca_2	fill in the blank 6e8479094027fca_3
Jar	fill in the blank 6e8479094027fca_4	fill in the blank 6e8479094027fca_5	fill in the blank 6e8479094027fca_6
Jars for production	fill in the blank 6e8479094027fca_7	fill in the blank 6e8479094027fca_8	fill in the blank 6e8479094027fca_9
Desired ending inventory	fill in the blank 6e8479094027fca_10	fill in the blank 6e8479094027fca_11	fill in the blank 6e8479094027fca_12
Total needs	fill in the blank 6e8479094027fca_13	fill in the blank 6e8479094027fca_14	fill in the blank 6e8479094027fca_15
Less: Beginning inventory	fill in the blank 6e8479094027fca_16	fill in the blank 6e8479094027fca_17	fill in the blank 6e8479094027fca_18
Jars purchased	fill in the blank 6e8479094027fca_19	fill in the blank 6e8479094027fca_20	fill in the blank 6e8479094027fca_21

Prepare a direct materials purchases budget for peanuts for the months of January and February.

Peanut Land Inc.
Direct Materials Purchases Budget for Peanuts
For January and February
	January	February	Total
Production	fill in the blank bf4d68fc7fc3038_1	fill in the blank bf4d68fc7fc3038_2	fill in the blank bf4d68fc7fc3038_3
Ounces	fill in the blank bf4d68fc7fc3038_4	fill in the blank bf4d68fc7fc3038_5	fill in the blank bf4d68fc7fc3038_6
Ounces for production	fill in the blank bf4d68fc7fc3038_7	fill in the blank bf4d68fc7fc3038_8	fill in the blank bf4d68fc7fc3038_9
Desired ending inventory	fill in the blank bf4d68fc7fc3038_10	fill in the blank bf4d68fc7fc3038_11	fill in the blank bf4d68fc7fc3038_12
Total needs	fill in the blank bf4d68fc7fc3038_13	fill in the blank bf4d68fc7fc3038_14	fill in the blank bf4d68fc7fc3038_15
Less: Beginning inventory	fill in the blank bf4d68fc7fc3038_16	fill in the blank bf4d68fc7fc3038_17	fill in the blank bf4d68fc7fc3038_18
Ounces purchased	fill in the blank bf4d68fc7fc3038_19	fill in the blank bf4d68fc7fc3038_20	fill in the blank bf4d68fc7fc3038_21