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: Company policy requires that ending inventories for each month be 25% of next month's sales. At the beginning of January, the inventory of peanut butter is 32,000 jars. 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. 2. Prepare a direct materials purchases budget for jars for the months of January and February. 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