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 January 70,000 February 75,000 March 40,000 April 50,000 Dollar Sales ($) 140,000 150,000 80,000 100,000 Company policy requires that ending inventories for each month be 15% 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 40,000 185,000 Sales 70,000 75,000 Desired ending inventory Total needs Less: Beginning inventory Units produced 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 Sales Desired ending inventory Total needs Less: Beginning inventory Units produced January February March Total 70,000 75,000 40,000 185,000 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 Production Jar Jars for production Desired ending inventory Total needs Less: Beginning inventory Jars purchased January February Total 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 Production Ounces Ounces for production Desired ending inventory Total needs Less: Beginning inventory Ounces purchased January February Total A