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 80,000 144,000 February 85,000 153,000 March 40,000 72,000 April 50,000 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 36,000 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: Question Content Area 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. January February March Total Sales fill in the blank 50a181f77fb500d_1 fill in the blank 50a181f77fb500d_2 fill in the blank 50a181f77fb500d_3 fill in the blank 50a181f77fb500d_4 Desired ending inventory fill in the blank 50a181f77fb500d_5 fill in the blank 50a181f77fb500d_6 fill in the blank 50a181f77fb500d_7 fill in the blank 50a181f77fb500d_8 Total needs fill in the blank 50a181f77fb500d_9 fill in the blank 50a181f77fb500d_10 fill in the blank 50a181f77fb500d_11 fill in the blank 50a181f77fb500d_12 Less: Beginning inventory fill in the blank 50a181f77fb500d_13 fill in the blank 50a181f77fb500d_14 fill in the blank 50a181f77fb500d_15 fill in the blank 50a181f77fb500d_16 Units produced fill in the blank 50a181f77fb500d_17 fill in the blank 50a181f77fb500d_18 fill in the blank 50a181f77fb500d_19 fill in the blank 50a181f77fb500d_20 Feedback Area Feedback Question Content Area 2. Prepare a direct materials purchases budget for jars for the months of January and February. January February Total Production fill in the blank f5e610fbd00cfb8_1 fill in the blank f5e610fbd00cfb8_2 fill in the blank f5e610fbd00cfb8_3 Jar fill in the blank f5e610fbd00cfb8_4 fill in the blank f5e610fbd00cfb8_5 fill in the blank f5e610fbd00cfb8_6 Jars for production fill in the blank f5e610fbd00cfb8_7 fill in the blank f5e610fbd00cfb8_8 fill in the blank f5e610fbd00cfb8_9 Desired ending inventory fill in the blank f5e610fbd00cfb8_10 fill in the blank f5e610fbd00cfb8_11 fill in the blank f5e610fbd00cfb8_12 Total needs fill in the blank f5e610fbd00cfb8_13 fill in the blank f5e610fbd00cfb8_14 fill in the blank f5e610fbd00cfb8_15 Less: Beginning inventory fill in the blank f5e610fbd00cfb8_16 fill in the blank f5e610fbd00cfb8_17 fill in the blank f5e610fbd00cfb8_18 Jars purchased fill in the blank f5e610fbd00cfb8_19 fill in the blank f5e610fbd00cfb8_20 fill in the blank f5e610fbd00cfb8_21 Feedback Area Feedback Question Content Area Prepare a direct materials purchases budget for peanuts for the months of January and February. January February Total Production fill in the blank 16173201406af8b_1 fill in the blank 16173201406af8b_2 fill in the blank 16173201406af8b_3 Ounces fill in the blank 16173201406af8b_4 fill in the blank 16173201406af8b_5 fill in the blank 16173201406af8b_6 Ounces for production fill in the blank 16173201406af8b_7 fill in the blank 16173201406af8b_8 fill in the blank 16173201406af8b_9 Desired ending inventory fill in the blank 16173201406af8b_10 fill in the blank 16173201406af8b_11 fill in the blank 16173201406af8b_12 Total needs fill in the blank 16173201406af8b_13 fill in the blank 16173201406af8b_14 fill in the blank 16173201406af8b_15 Less: Beginning inventory fill in the blank 16173201406af8b_16 fill in the blank 16173201406af8b_17 fill in the blank 16173201406af8b_18 Ounces purchased fill in the blank 16173201406af8b_19 fill in the blank 16173201406af8b_20 fill in the blank 16173201406af8b_21

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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.