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	80,000
February	75,000	150,000
March	70,000	140,000
April	66,000	132,000

Company policy requires that ending inventories for each month be 20% 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	fill in the blank 071f92028f87071_1	fill in the blank 071f92028f87071_2	fill in the blank 071f92028f87071_3	fill in the blank 071f92028f87071_4
Desired ending inventory	fill in the blank 071f92028f87071_5	fill in the blank 071f92028f87071_6	fill in the blank 071f92028f87071_7	fill in the blank 071f92028f87071_8
Total needs	fill in the blank 071f92028f87071_9	fill in the blank 071f92028f87071_10	fill in the blank 071f92028f87071_11	fill in the blank 071f92028f87071_12
Less: Beginning inventory	fill in the blank 071f92028f87071_13	fill in the blank 071f92028f87071_14	fill in the blank 071f92028f87071_15	fill in the blank 071f92028f87071_16
Units produced	fill in the blank 071f92028f87071_17	fill in the blank 071f92028f87071_18	fill in the blank 071f92028f87071_19	fill in the blank 071f92028f87071_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 1e1f0e089016ff2_1	fill in the blank 1e1f0e089016ff2_2	fill in the blank 1e1f0e089016ff2_3
Jar	fill in the blank 1e1f0e089016ff2_4	fill in the blank 1e1f0e089016ff2_5	fill in the blank 1e1f0e089016ff2_6
Jars for production	fill in the blank 1e1f0e089016ff2_7	fill in the blank 1e1f0e089016ff2_8	fill in the blank 1e1f0e089016ff2_9
Desired ending inventory	fill in the blank 1e1f0e089016ff2_10	fill in the blank 1e1f0e089016ff2_11	fill in the blank 1e1f0e089016ff2_12
Total needs	fill in the blank 1e1f0e089016ff2_13	fill in the blank 1e1f0e089016ff2_14	fill in the blank 1e1f0e089016ff2_15
Less: Beginning inventory	fill in the blank 1e1f0e089016ff2_16	fill in the blank 1e1f0e089016ff2_17	fill in the blank 1e1f0e089016ff2_18
Jars purchased	fill in the blank 1e1f0e089016ff2_19	fill in the blank 1e1f0e089016ff2_20	fill in the blank 1e1f0e089016ff2_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 22b01f050077067_1	fill in the blank 22b01f050077067_2	fill in the blank 22b01f050077067_3
Ounces	fill in the blank 22b01f050077067_4	fill in the blank 22b01f050077067_5	fill in the blank 22b01f050077067_6
Ounces for production	fill in the blank 22b01f050077067_7	fill in the blank 22b01f050077067_8	fill in the blank 22b01f050077067_9
Desired ending inventory	fill in the blank 22b01f050077067_10	fill in the blank 22b01f050077067_11	fill in the blank 22b01f050077067_12
Total needs	fill in the blank 22b01f050077067_13	fill in the blank 22b01f050077067_14	fill in the blank 22b01f050077067_15
Less: Beginning inventory	fill in the blank 22b01f050077067_16	fill in the blank 22b01f050077067_17	fill in the blank 22b01f050077067_18
Ounces purchased	fill in the blank 22b01f050077067_19	fill in the blank 22b01f050077067_20	fill in the blank 22b01f050077067_21