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 SalesDollar Sales ($)January50,000105,000February80,000168,000March70,000147,000April54,000113,400

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 33,000 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.make 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.make a direct materials purchases budget for jars for the months of January and February