Production Budget and Direct Materials Purchases Budgets

Pets Plus, Inc. produces otic fluid for dogs. The otic fluid is sold in 12-ounce plastic bottles. The sales budget for the first four months of the year is as follows:

Month	Unit Sales
January	80,000
February	55,000
March	40,000
April	46,000

Company policy requires that ending inventories for each month be 10% of next month's sales. At the beginning of January, the inventory of otic fluid is 39,000 bottles. Each bottle of otic fluid needs two raw materials: eight ounces of a mix of salicylic acid and water and one plastic bottle. 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.

Pets Plus, Inc. Production Budget For the First Quarter of the Year \begin{tabular}{llll} \hline Line Item Description January February March \\ Sales \\ Desired ending inventory \\ Lesal needs \\ Units produced \end{tabular} Pet Plus, Inc. Direct Materials Purchases Budget for Bottles For January and February Line Item Description January February Total Production Bottles Bottles for production Desired ending inventory Bottles Pet Plus, Inc. Direct Materials Purchases Budget for Fluid mixture For January and February Line Item Description January February Production Ounces Ounces for production Desired ending inventory Total needs Oess: Beginning inventory