Peanut Land Inc. produces all-natural organic peanut butter. The peanut butter is sold in 12-ounce jars. The
Question:
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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 72,000 February 45,000 81,000 March 60,000 108,000 April 42,000 75,600 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 37,000 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 Desired ending inventory Total needs Less: Beginning inventory Units produced Feedback
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 Jar Jars for production Desired ending inventory Total needs Less: Beginning inventory Jars purchased Feedback
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 Ounces Ounces for production Desired ending inventory Total needs Less: Beginning inventory Ounces purchased
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen