Unit Sales Dollar Sales ($) January 50,000 90,000 February March 60,000 108,000 40,000 April 50,000 72,000 90,000 Company policy requires that ending inventories for each month be 10% of next month's sales. At the beginning of January, the inventory of peanut butter is 39,000 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 Sales Desired ending inventory Total needs 6,000 January February March Total 50,000 60,000 40,000 150,000 4,000 56,000 64,000 5,000 5,000 45,000 155,000 Less: Beginning inventory Units produced 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 Production Jar January February Total Jars for production Desired ending inventory Total needs Less: Beginning inventory Jars purchased 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 Production Ounces Ounces for production Desired ending inventory Total needs Less: Beginning Inventory Ounces purchased January February Total