Question

Jani Subramanian, owner of Jani's Flowers and Gifts, produces gift baskets for various special occasions. Each gift basket includes fruit or assorted small gifts (e.g., a coffee mug, deck of cards, novelty cocoa mixes, scented soap) in a basket that is wrapped in colorful cellophane. Jani has estimated the following unit sales of the standard gift basket for the rest of the year and for January of next year.

September	250
October	200
November	230
December	380
January	100

Jani likes to have 5% of the next month's sales needs on hand at the end of each month. This requirement was met on August 31.

Two materials are needed for each fruit basket:

Fruit	1 pound
Small gifts	6 items

The materials inventory policy is to have 5% of the next month's fruit needs on hand and 30% of the next month's production needs of small gifts. (The relatively low inventory amount for fruit is designed to prevent spoilage.) Materials inventory on August 31 met this company policy.

Required:

1. Prepare a production budget for September, October, November, and December for gift baskets. (Note: Round all answers to the nearest whole unit.)

Jani's Flowers and Gifts
Production Budget for Gift Baskets
For September, October, November, and December
	September	October	November	December
Sales	250	200	230	380
Desired ending inventory	10	12	19	5
Needed	260	212	249	385
Less: Beginning inventory	13	10	12	19
Production	247	202	237	366

Feedback

Correct

2. Prepare a direct materials purchases budget for the two types of materials used in the production of gift baskets for the months of September, October, and November. (Note: Round answers to the nearest whole unit.)

Jani's Flowers and Gifts
Direct Materials Purchases Budget
For September, October, and November
Fruit:	September	October	November
Production	247	202	237
Pounds of fruit	1	1	1
Required for production	247	202	237
Desired ending inventory	10	12	18
Total needs	257	214	255
Less: Beginning inventory	12	10	12
Pounds purchased	245	204	243
Small gifts:
Production	247	202	237
Items required	6	6	6
Needed for production	1482	1212	1422
Desired inventory	?	?	?
Total needs	?	?	?
Less: Beginning inventory	?	?	?
Items purchased	?	?	?

Answer 1