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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	154,000
February	60,000	132,000
March	50,000	110,000
April	46,000	101,200

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 31,000 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:

Question Content Area

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 fffb340affa0078_1	fill in the blank fffb340affa0078_2	fill in the blank fffb340affa0078_3	fill in the blank fffb340affa0078_4
Desired ending inventory	fill in the blank fffb340affa0078_5	fill in the blank fffb340affa0078_6	fill in the blank fffb340affa0078_7	fill in the blank fffb340affa0078_8
Total needs	fill in the blank fffb340affa0078_9	fill in the blank fffb340affa0078_10	fill in the blank fffb340affa0078_11	fill in the blank fffb340affa0078_12
Less: Beginning inventory	fill in the blank fffb340affa0078_13	fill in the blank fffb340affa0078_14	fill in the blank fffb340affa0078_15	fill in the blank fffb340affa0078_16
Units produced	fill in the blank fffb340affa0078_17	fill in the blank fffb340affa0078_18	fill in the blank fffb340affa0078_19	fill in the blank fffb340affa0078_20

Question Content Area

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 8030f0052fbb02c_1	fill in the blank 8030f0052fbb02c_2	fill in the blank 8030f0052fbb02c_3
Jar	fill in the blank 8030f0052fbb02c_4	fill in the blank 8030f0052fbb02c_5	fill in the blank 8030f0052fbb02c_6
Jars for production	fill in the blank 8030f0052fbb02c_7	fill in the blank 8030f0052fbb02c_8	fill in the blank 8030f0052fbb02c_9
Desired ending inventory	fill in the blank 8030f0052fbb02c_10	fill in the blank 8030f0052fbb02c_11	fill in the blank 8030f0052fbb02c_12
Total needs	fill in the blank 8030f0052fbb02c_13	fill in the blank 8030f0052fbb02c_14	fill in the blank 8030f0052fbb02c_15
Less: Beginning inventory	fill in the blank 8030f0052fbb02c_16	fill in the blank 8030f0052fbb02c_17	fill in the blank 8030f0052fbb02c_18
Jars purchased	fill in the blank 8030f0052fbb02c_19	fill in the blank 8030f0052fbb02c_20	fill in the blank 8030f0052fbb02c_21

Question Content Area

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 c74971042ffcf9d_1	fill in the blank c74971042ffcf9d_2	fill in the blank c74971042ffcf9d_3
Ounces	fill in the blank c74971042ffcf9d_4	fill in the blank c74971042ffcf9d_5	fill in the blank c74971042ffcf9d_6
Ounces for production	fill in the blank c74971042ffcf9d_7	fill in the blank c74971042ffcf9d_8	fill in the blank c74971042ffcf9d_9
Desired ending inventory	fill in the blank c74971042ffcf9d_10	fill in the blank c74971042ffcf9d_11	fill in the blank c74971042ffcf9d_12
Total needs	fill in the blank c74971042ffcf9d_13	fill in the blank c74971042ffcf9d_14	fill in the blank c74971042ffcf9d_15
Less: Beginning inventory	fill in the blank c74971042ffcf9d_16	fill in the blank c74971042ffcf9d_17	fill in the blank c74971042ffcf9d_18
Ounces purchased	fill in the blank c74971042ffcf9d_19	fill in the blank c74971042ffcf9d_20	fill in the blank c74971042ffcf9d_21