roduction 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 60,000 108,000 February 85,000 153,000 March 70,000 126,000 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 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 c4f25105903204b_1 fill in the blank c4f25105903204b_2 fill in the blank c4f25105903204b_3 fill in the blank c4f25105903204b_4 Desired ending inventory fill in the blank c4f25105903204b_5 fill in the blank c4f25105903204b_6 fill in the blank c4f25105903204b_7 fill in the blank c4f25105903204b_8 Total needs fill in the blank c4f25105903204b_9 fill in the blank c4f25105903204b_10 fill in the blank c4f25105903204b_11 fill in the blank c4f25105903204b_12 Less: Beginning inventory fill in the blank c4f25105903204b_13 fill in the blank c4f25105903204b_14 fill in the blank c4f25105903204b_15 fill in the blank c4f25105903204b_16 Units produced fill in the blank c4f25105903204b_17 fill in the blank c4f25105903204b_18 fill in the blank c4f25105903204b_19 fill in the blank c4f25105903204b_20 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 7f50e105d048064_1 fill in the blank 7f50e105d048064_2 fill in the blank 7f50e105d048064_3 Jar fill in the blank 7f50e105d048064_4 fill in the blank 7f50e105d048064_5 fill in the blank 7f50e105d048064_6 Jars for production fill in the blank 7f50e105d048064_7 fill in the blank 7f50e105d048064_8 fill in the blank 7f50e105d048064_9 Desired ending inventory fill in the blank 7f50e105d048064_10 fill in the blank 7f50e105d048064_11 fill in the blank 7f50e105d048064_12 Total needs fill in the blank 7f50e105d048064_13 fill in the blank 7f50e105d048064_14 fill in the blank 7f50e105d048064_15 Less: Beginning inventory fill in the blank 7f50e105d048064_16 fill in the blank 7f50e105d048064_17 fill in the blank 7f50e105d048064_18 Jars purchased fill in the blank 7f50e105d048064_19 fill in the blank 7f50e105d048064_20 fill in the blank 7f50e105d048064_21 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 12643801d05afbe_1 fill in the blank 12643801d05afbe_2 fill in the blank 12643801d05afbe_3 Ounces fill in the blank 12643801d05afbe_4 fill in the blank 12643801d05afbe_5 fill in the blank 12643801d05afbe_6 Ounces for production fill in the blank 12643801d05afbe_7 fill in the blank 12643801d05afbe_8 fill in the blank 12643801d05afbe_9 Desired ending inventory fill in the blank 12643801d05afbe_10 fill in the blank 12643801d05afbe_11 fill in the blank 12643801d05afbe_12 Total needs fill in the blank 12643801d05afbe_13 fill in the blank 12643801d05afbe_14 fill in the blank 12643801d05afbe_15 Less: Beginning inventory fill in the blank 12643801d05afbe_16 fill in the blank 12643801d05afbe_17 fill in the blank 12643801d05afbe_18 Ounces purchased
roduction 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 60,000 108,000 February 85,000 153,000 March 70,000 126,000 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 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 c4f25105903204b_1 fill in the blank c4f25105903204b_2 fill in the blank c4f25105903204b_3 fill in the blank c4f25105903204b_4 Desired ending inventory fill in the blank c4f25105903204b_5 fill in the blank c4f25105903204b_6 fill in the blank c4f25105903204b_7 fill in the blank c4f25105903204b_8 Total needs fill in the blank c4f25105903204b_9 fill in the blank c4f25105903204b_10 fill in the blank c4f25105903204b_11 fill in the blank c4f25105903204b_12 Less: Beginning inventory fill in the blank c4f25105903204b_13 fill in the blank c4f25105903204b_14 fill in the blank c4f25105903204b_15 fill in the blank c4f25105903204b_16 Units produced fill in the blank c4f25105903204b_17 fill in the blank c4f25105903204b_18 fill in the blank c4f25105903204b_19 fill in the blank c4f25105903204b_20 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 7f50e105d048064_1 fill in the blank 7f50e105d048064_2 fill in the blank 7f50e105d048064_3 Jar fill in the blank 7f50e105d048064_4 fill in the blank 7f50e105d048064_5 fill in the blank 7f50e105d048064_6 Jars for production fill in the blank 7f50e105d048064_7 fill in the blank 7f50e105d048064_8 fill in the blank 7f50e105d048064_9 Desired ending inventory fill in the blank 7f50e105d048064_10 fill in the blank 7f50e105d048064_11 fill in the blank 7f50e105d048064_12 Total needs fill in the blank 7f50e105d048064_13 fill in the blank 7f50e105d048064_14 fill in the blank 7f50e105d048064_15 Less: Beginning inventory fill in the blank 7f50e105d048064_16 fill in the blank 7f50e105d048064_17 fill in the blank 7f50e105d048064_18 Jars purchased fill in the blank 7f50e105d048064_19 fill in the blank 7f50e105d048064_20 fill in the blank 7f50e105d048064_21 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 12643801d05afbe_1 fill in the blank 12643801d05afbe_2 fill in the blank 12643801d05afbe_3 Ounces fill in the blank 12643801d05afbe_4 fill in the blank 12643801d05afbe_5 fill in the blank 12643801d05afbe_6 Ounces for production fill in the blank 12643801d05afbe_7 fill in the blank 12643801d05afbe_8 fill in the blank 12643801d05afbe_9 Desired ending inventory fill in the blank 12643801d05afbe_10 fill in the blank 12643801d05afbe_11 fill in the blank 12643801d05afbe_12 Total needs fill in the blank 12643801d05afbe_13 fill in the blank 12643801d05afbe_14 fill in the blank 12643801d05afbe_15 Less: Beginning inventory fill in the blank 12643801d05afbe_16 fill in the blank 12643801d05afbe_17 fill in the blank 12643801d05afbe_18 Ounces purchased
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
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 | 60,000 | 108,000 |
| February | 85,000 | 153,000 |
| March | 70,000 | 126,000 |
| 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 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 c4f25105903204b_1 | fill in the blank c4f25105903204b_2 | fill in the blank c4f25105903204b_3 | fill in the blank c4f25105903204b_4 |
| Desired ending inventory | fill in the blank c4f25105903204b_5 | fill in the blank c4f25105903204b_6 | fill in the blank c4f25105903204b_7 | fill in the blank c4f25105903204b_8 |
| Total needs | fill in the blank c4f25105903204b_9 | fill in the blank c4f25105903204b_10 | fill in the blank c4f25105903204b_11 | fill in the blank c4f25105903204b_12 |
| Less: Beginning inventory | fill in the blank c4f25105903204b_13 | fill in the blank c4f25105903204b_14 | fill in the blank c4f25105903204b_15 | fill in the blank c4f25105903204b_16 |
| Units produced | fill in the blank c4f25105903204b_17 | fill in the blank c4f25105903204b_18 | fill in the blank c4f25105903204b_19 | fill in the blank c4f25105903204b_20 |
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 7f50e105d048064_1 | fill in the blank 7f50e105d048064_2 | fill in the blank 7f50e105d048064_3 |
| Jar | fill in the blank 7f50e105d048064_4 | fill in the blank 7f50e105d048064_5 | fill in the blank 7f50e105d048064_6 |
| Jars for production | fill in the blank 7f50e105d048064_7 | fill in the blank 7f50e105d048064_8 | fill in the blank 7f50e105d048064_9 |
| Desired ending inventory | fill in the blank 7f50e105d048064_10 | fill in the blank 7f50e105d048064_11 | fill in the blank 7f50e105d048064_12 |
| Total needs | fill in the blank 7f50e105d048064_13 | fill in the blank 7f50e105d048064_14 | fill in the blank 7f50e105d048064_15 |
| Less: Beginning inventory | fill in the blank 7f50e105d048064_16 | fill in the blank 7f50e105d048064_17 | fill in the blank 7f50e105d048064_18 |
| Jars purchased | fill in the blank 7f50e105d048064_19 | fill in the blank 7f50e105d048064_20 | fill in the blank 7f50e105d048064_21 |
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 12643801d05afbe_1 | fill in the blank 12643801d05afbe_2 | fill in the blank 12643801d05afbe_3 |
| Ounces | fill in the blank 12643801d05afbe_4 | fill in the blank 12643801d05afbe_5 | fill in the blank 12643801d05afbe_6 |
| Ounces for production | fill in the blank 12643801d05afbe_7 | fill in the blank 12643801d05afbe_8 | fill in the blank 12643801d05afbe_9 |
| Desired ending inventory | fill in the blank 12643801d05afbe_10 | fill in the blank 12643801d05afbe_11 | fill in the blank 12643801d05afbe_12 |
| Total needs | fill in the blank 12643801d05afbe_13 | fill in the blank 12643801d05afbe_14 | fill in the blank 12643801d05afbe_15 |
| Less: Beginning inventory | fill in the blank 12643801d05afbe_16 | fill in the blank 12643801d05afbe_17 | fill in the blank 12643801d05afbe_18 |
| Ounces purchased | fill in the blank 12643801d05afbe_19 | fill in the blank 12643801d05afbe_20 | fill in the blank 12643801d05afbe_21 |
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