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 70,000 126,000 February March 65,000 117,000 60,000 108,000 April 62,000 111,600 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 35,000 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 70,000 65,000 60,000 195,000 Desired ending inventory 9,750 9,000 9.300 9300 Total needs 79,750 14,000 69,300 204,300 Less: Beginning inventory 35,000 9,750 9,000 35,000 All work saved. Previous Next>> Submit Test for Grading