Smee Inc. produces organic peanut butter jars for sale. The document provides the sales budget for the first 4 months of the year and states the company's inventory policies, which require ending inventories to be 15% of next month's sales for peanut butter and 20% of next month's production needs for raw materials. The starting inventory for peanut butter on January 1st is provided.

1. Smee 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:
Company policy requires that ending inventories for each month
be 15 percent 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 percent of the
next month’s production needs. That policy was met on January
1.
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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.
Smee Inc.
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Production Budget
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For the First Quarter of the Year
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2. January
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February
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March
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Total
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Sales
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Correct 9 of Item 1
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Correct 10 of Item 1
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3. Correct 11 of Item 1
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Correct 12 of Item 1
Desired ending inventory
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Correct 14 of Item 1
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Correct 15 of Item 1
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Correct 16 of Item 1
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Correct 17 of Item 1

4. Total needs
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Correct 19 of Item 1
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Correct 20 of Item 1
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Correct 21 of Item 1
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Correct 22 of Item 1
Less: Beginning inventory
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5. Correct 24 of Item 1
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Correct 25 of Item 1
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Correct 26 of Item 1
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Correct 27 of Item 1
Units produced
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Correct 29 of Item 1
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Correct 30 of Item 1

6. [removed]
Correct 31 of Item 1
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Correct 32 of Item 1
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Solution
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2a.
Prepare a direct materials purchases budget for jars for the
months of January and February. Do not include a
multiplication symbol as part of your answer.
Smee, Inc.
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Direct Materials Purchases Budget for Jars
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For January and February
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January
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8. February
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Total
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Production
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Correct 8 of Item 2
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Correct 9 of Item 2

9. [removed]
Correct 10 of Item 2
Jar
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Correct 12 of Item 2
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Correct 13 of Item 2
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10. Correct 14 of Item 2
Jars for production
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Correct 16 of Item 2
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Correct 17 of Item 2
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Correct 18 of Item 2
Desired ending inventory

11. [removed]
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Correct 20 of Item 2
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Correct 21 of Item 2
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Correct 22 of Item 2
Total needs
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12. [removed]
Correct 24 of Item 2
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Correct 25 of Item 2
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Correct 26 of Item 2
Less: Beginning inventory
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13. Correct 28 of Item 2
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Correct 29 of Item 2
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Correct 30 of Item 2
Jars purchased
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Correct 32 of Item 2

14. [removed]
Correct 33 of Item 2
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Correct 34 of Item 2
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