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 40,000 February 65,000 March 70,000 April 42,000 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 31,000 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 Required Download Excel spreadsheet Question Content Area 1 Prepare a production budget for the first quarter of the year Show the number of bottles that should be produced each month as well as for the quarter in total Pets Plus, Inc Production Budget For the First Quarter of the Year Line Item Description January February March Total Sales Desired ending inventory Total needs Less Beginning inventory Units produced 2 Prepare a direct materials purchases budget for bottles for the months of January and February Round all calculations to the nearest whole number 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 Total needs Less Beginning inventory Bottles purchased Question Content Area Prepare a direct materials purchases budget for salicylic acid and water mixture for the months of January and February Round all calculations to the nearest whole number Pet Plus, Inc Direct Materials Purchases Budget for Fluid mixture For January and February Line Item Description January February Total Production Ounces Ounces for production Desired ending inventory Total needs Less Beginning inventory Ounces purchased

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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

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	40,000
February	65,000
March	70,000
April	42,000

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 31,000 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.

Required:

Download Excel spreadsheet

Question Content Area

1. Prepare a production budget for the first quarter of the year. Show the number of bottles that should be produced each month as well as for the quarter in total.

**Pets Plus, Inc.** **Production Budget** **For the First Quarter of the Year**
Line Item Description	January	February	March	Total
Sales
Desired ending inventory
Total needs
Less: Beginning inventory
Units produced

2. Prepare a direct materials purchases budget for bottles for the months of January and February. Round all calculations to the nearest whole number.

**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
Total needs
Less: Beginning inventory
Bottles purchased

Question Content Area

Prepare a direct materials purchases budget for salicylic acid and water mixture for the months of January and February. Round all calculations to the nearest whole number.