The jam will be produced in bulk by JJJ Ltd for another company to package and market. The current price of local fruit is fairly stable, with strawberries costing $4.30 per kg. A high-quality sugar extract, costing 95 cents per kg is also used to make the jams. The 1 kg jam recipe requires 0.65kg of strawberries and 0.35 kg of sugar. Jasmine is confident that the company can sell 800 kgs of Strawberry Jam in the first month of operations with sales increasing at a rate of 10% per month for the first six months when sales will then stabilise. The present market price is $15 per kg for Strawberry Jam. These prices are expected to remain constant for the next three months.

JJJ Ltd generally keeps enough raw materials on hand to cope with three weeks of next months production needs (to guard against supply problems). It is also company policy to keep finished goods inventory equal to one week of next months sales, so that customers can continue being supplied even if there are production breakdowns or other problems. [Note: Assume that one week equals of one month]

Please only do Production budget in budget preparation.

October Total Novemb Decemb er er - Sales Desired ending inventory Total needs less: Beginning inventory Units to be produced