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 4 months of the year is as follows: Unit Sales Dollar Sales ($) January 36,000 108,000 February 38,000 114,000 March 41,000 123,000 April 43,000 129,000 Company policy requires that ending inventories for each month be 25% of next month’s sales. At the beginning of January, the inventory of peanut butter is 9,300 jars. Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar set (a glass jar and lid). Company policy requires that ending inventories of raw materials for each month be 10% 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 f117240cc06606f_1 fill in the blank f117240cc06606f_2 fill in the blank f117240cc06606f_3 fill in the blank f117240cc06606f_4 Desired ending inventory fill in the blank f117240cc06606f_5 fill in the blank f117240cc06606f_6 fill in the blank f117240cc06606f_7 fill in the blank f117240cc06606f_8 Total needs fill in the blank f117240cc06606f_9 fill in the blank f117240cc06606f_10 fill in the blank f117240cc06606f_11 fill in the blank f117240cc06606f_12 Less: Beginning inventory fill in the blank f117240cc06606f_13 fill in the blank f117240cc06606f_14 fill in the blank f117240cc06606f_15 fill in the blank f117240cc06606f_16 Units produced fill in the blank f117240cc06606f_17 fill in the blank f117240cc06606f_18 fill in the blank f117240cc06606f_19 fill in the blank f117240cc06606f_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 7d7abbf7e066fc3_1 fill in the blank 7d7abbf7e066fc3_2 fill in the blank 7d7abbf7e066fc3_3 Number of Jars fill in the blank 7d7abbf7e066fc3_4 fill in the blank 7d7abbf7e066fc3_5 fill in the blank 7d7abbf7e066fc3_6 Jars for production fill in the blank 7d7abbf7e066fc3_7 fill in the blank 7d7abbf7e066fc3_8 fill in the blank 7d7abbf7e066fc3_9 Desired ending inventory fill in the blank 7d7abbf7e066fc3_10 fill in the blank 7d7abbf7e066fc3_11 fill in the blank 7d7abbf7e066fc3_12 Total needs fill in the blank 7d7abbf7e066fc3_13 fill in the blank 7d7abbf7e066fc3_14 fill in the blank 7d7abbf7e066fc3_15 Less: Beginning inventory fill in the blank 7d7abbf7e066fc3_16 fill in the blank 7d7abbf7e066fc3_17 fill in the blank 7d7abbf7e066fc3_18 Jars purchased fill in the blank 7d7abbf7e066fc3_19 fill in the blank 7d7abbf7e066fc3_20 fill in the blank 7d7abbf7e066fc3_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 a9476dff6f82fc7_1 fill in the blank a9476dff6f82fc7_2 fill in the blank a9476dff6f82fc7_3 Ounces fill in the blank a9476dff6f82fc7_4 fill in the blank a9476dff6f82fc7_5 fill in the blank a9476dff6f82fc7_6 Ounces for production fill in the blank a9476dff6f82fc7_7 fill in the blank a9476dff6f82fc7_8 fill in the blank a9476dff6f82fc7_9 Desired ending inventory fill in the blank a9476dff6f82fc7_10 fill in the blank a9476dff6f82fc7_11 fill in the blank a9476dff6f82fc7_12 Total needs fill in the blank a9476dff6f82fc7_13 fill in the blank a9476dff6f82fc7_14 fill in the blank a9476dff6f82fc7_15 Less: Beginning inventory fill in the blank a9476dff6f82fc7_16 fill in the blank a9476dff6f82fc7_17 fill in the blank a9476dff6f82fc7_18 Ounces purchased fill in the blank a9476dff6f82fc7_19 fill in the blank a9476dff6f82fc7_20 fill in the blank a9476dff6f82fc7_21
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 4 months of the year is as follows: Unit Sales Dollar Sales ($) January 36,000 108,000 February 38,000 114,000 March 41,000 123,000 April 43,000 129,000 Company policy requires that ending inventories for each month be 25% of next month’s sales. At the beginning of January, the inventory of peanut butter is 9,300 jars. Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar set (a glass jar and lid). Company policy requires that ending inventories of raw materials for each month be 10% 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 f117240cc06606f_1 fill in the blank f117240cc06606f_2 fill in the blank f117240cc06606f_3 fill in the blank f117240cc06606f_4 Desired ending inventory fill in the blank f117240cc06606f_5 fill in the blank f117240cc06606f_6 fill in the blank f117240cc06606f_7 fill in the blank f117240cc06606f_8 Total needs fill in the blank f117240cc06606f_9 fill in the blank f117240cc06606f_10 fill in the blank f117240cc06606f_11 fill in the blank f117240cc06606f_12 Less: Beginning inventory fill in the blank f117240cc06606f_13 fill in the blank f117240cc06606f_14 fill in the blank f117240cc06606f_15 fill in the blank f117240cc06606f_16 Units produced fill in the blank f117240cc06606f_17 fill in the blank f117240cc06606f_18 fill in the blank f117240cc06606f_19 fill in the blank f117240cc06606f_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 7d7abbf7e066fc3_1 fill in the blank 7d7abbf7e066fc3_2 fill in the blank 7d7abbf7e066fc3_3 Number of Jars fill in the blank 7d7abbf7e066fc3_4 fill in the blank 7d7abbf7e066fc3_5 fill in the blank 7d7abbf7e066fc3_6 Jars for production fill in the blank 7d7abbf7e066fc3_7 fill in the blank 7d7abbf7e066fc3_8 fill in the blank 7d7abbf7e066fc3_9 Desired ending inventory fill in the blank 7d7abbf7e066fc3_10 fill in the blank 7d7abbf7e066fc3_11 fill in the blank 7d7abbf7e066fc3_12 Total needs fill in the blank 7d7abbf7e066fc3_13 fill in the blank 7d7abbf7e066fc3_14 fill in the blank 7d7abbf7e066fc3_15 Less: Beginning inventory fill in the blank 7d7abbf7e066fc3_16 fill in the blank 7d7abbf7e066fc3_17 fill in the blank 7d7abbf7e066fc3_18 Jars purchased fill in the blank 7d7abbf7e066fc3_19 fill in the blank 7d7abbf7e066fc3_20 fill in the blank 7d7abbf7e066fc3_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 a9476dff6f82fc7_1 fill in the blank a9476dff6f82fc7_2 fill in the blank a9476dff6f82fc7_3 Ounces fill in the blank a9476dff6f82fc7_4 fill in the blank a9476dff6f82fc7_5 fill in the blank a9476dff6f82fc7_6 Ounces for production fill in the blank a9476dff6f82fc7_7 fill in the blank a9476dff6f82fc7_8 fill in the blank a9476dff6f82fc7_9 Desired ending inventory fill in the blank a9476dff6f82fc7_10 fill in the blank a9476dff6f82fc7_11 fill in the blank a9476dff6f82fc7_12 Total needs fill in the blank a9476dff6f82fc7_13 fill in the blank a9476dff6f82fc7_14 fill in the blank a9476dff6f82fc7_15 Less: Beginning inventory fill in the blank a9476dff6f82fc7_16 fill in the blank a9476dff6f82fc7_17 fill in the blank a9476dff6f82fc7_18 Ounces purchased fill in the blank a9476dff6f82fc7_19 fill in the blank a9476dff6f82fc7_20 fill in the blank a9476dff6f82fc7_21
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 4 months of the year is as follows:
| Unit Sales | Dollar Sales ($) | |||
| January | 36,000 | 108,000 | ||
| February | 38,000 | 114,000 | ||
| March | 41,000 | 123,000 | ||
| April | 43,000 | 129,000 |
Company policy requires that ending inventories for each month be 25% of next month’s sales. At the beginning of January, the inventory of peanut butter is 9,300 jars.
Each jar of peanut butter needs two raw materials: 24 ounces of peanuts and one jar set (a glass jar and lid). Company policy requires that ending inventories of raw materials for each month be 10% 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 f117240cc06606f_1 | fill in the blank f117240cc06606f_2 | fill in the blank f117240cc06606f_3 | fill in the blank f117240cc06606f_4 |
| Desired ending inventory | fill in the blank f117240cc06606f_5 | fill in the blank f117240cc06606f_6 | fill in the blank f117240cc06606f_7 | fill in the blank f117240cc06606f_8 |
| Total needs | fill in the blank f117240cc06606f_9 | fill in the blank f117240cc06606f_10 | fill in the blank f117240cc06606f_11 | fill in the blank f117240cc06606f_12 |
| Less: Beginning inventory | fill in the blank f117240cc06606f_13 | fill in the blank f117240cc06606f_14 | fill in the blank f117240cc06606f_15 | fill in the blank f117240cc06606f_16 |
| Units produced | fill in the blank f117240cc06606f_17 | fill in the blank f117240cc06606f_18 | fill in the blank f117240cc06606f_19 | fill in the blank f117240cc06606f_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 7d7abbf7e066fc3_1 | fill in the blank 7d7abbf7e066fc3_2 | fill in the blank 7d7abbf7e066fc3_3 |
| Number of Jars | fill in the blank 7d7abbf7e066fc3_4 | fill in the blank 7d7abbf7e066fc3_5 | fill in the blank 7d7abbf7e066fc3_6 |
| Jars for production | fill in the blank 7d7abbf7e066fc3_7 | fill in the blank 7d7abbf7e066fc3_8 | fill in the blank 7d7abbf7e066fc3_9 |
| Desired ending inventory | fill in the blank 7d7abbf7e066fc3_10 | fill in the blank 7d7abbf7e066fc3_11 | fill in the blank 7d7abbf7e066fc3_12 |
| Total needs | fill in the blank 7d7abbf7e066fc3_13 | fill in the blank 7d7abbf7e066fc3_14 | fill in the blank 7d7abbf7e066fc3_15 |
| Less: Beginning inventory | fill in the blank 7d7abbf7e066fc3_16 | fill in the blank 7d7abbf7e066fc3_17 | fill in the blank 7d7abbf7e066fc3_18 |
| Jars purchased | fill in the blank 7d7abbf7e066fc3_19 | fill in the blank 7d7abbf7e066fc3_20 | fill in the blank 7d7abbf7e066fc3_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 a9476dff6f82fc7_1 | fill in the blank a9476dff6f82fc7_2 | fill in the blank a9476dff6f82fc7_3 |
| Ounces | fill in the blank a9476dff6f82fc7_4 | fill in the blank a9476dff6f82fc7_5 | fill in the blank a9476dff6f82fc7_6 |
| Ounces for production | fill in the blank a9476dff6f82fc7_7 | fill in the blank a9476dff6f82fc7_8 | fill in the blank a9476dff6f82fc7_9 |
| Desired ending inventory | fill in the blank a9476dff6f82fc7_10 | fill in the blank a9476dff6f82fc7_11 | fill in the blank a9476dff6f82fc7_12 |
| Total needs | fill in the blank a9476dff6f82fc7_13 | fill in the blank a9476dff6f82fc7_14 | fill in the blank a9476dff6f82fc7_15 |
| Less: Beginning inventory | fill in the blank a9476dff6f82fc7_16 | fill in the blank a9476dff6f82fc7_17 | fill in the blank a9476dff6f82fc7_18 |
| Ounces purchased | fill in the blank a9476dff6f82fc7_19 | fill in the blank a9476dff6f82fc7_20 | fill in the blank a9476dff6f82fc7_21 |
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