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 80,000 144,000 February 85,000 153,000 March 60,000 108,000 April 46,000 82,800 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 33,000 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 direct materials purchases budget for jars for the months of January and February. Please solve the table values with explanataion. 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 2. Prepare a direct materials purchases budget for peanuts for the months of January and February. January February Total Production Ounces Ounces for production Desired ending inventory Total needs Less: Beginning inventory Ounces purchased
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
529 2nd attmept.
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 | 80,000 | 144,000 |
| February | 85,000 | 153,000 |
| March | 60,000 | 108,000 |
| April | 46,000 | 82,800 |
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 33,000 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 direct materials purchases budget for jars for the months of January and February. Please solve the table values with explanataion.
| 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 |
2. Prepare a direct materials purchases budget for peanuts for the months of January and February.
| January | February | Total | |
| Production | |||
| Ounces | |||
| Ounces for production | |||
| Desired ending inventory | |||
| Total needs | |||
| Less: Beginning inventory | |||
| Ounces purchased |
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