Direct Materials Purchases Budget Marino\'s Frozen Pizza Inc. has determined fro
ID: 2394209 • Letter: D
Question
Direct Materials Purchases Budget
Marino's Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for June 2016:
Units
12" Pizza
16" Pizza
Budgeted production volume
14,100
20,500
There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows:
12" Pizza
16" Pizza
Direct materials:
Dough
0.90
lb. per unit
1.50
lbs. per unit
Tomato
0.60
1.00
Cheese
0.80
1.30
In addition, Marino's has determined the following information about each material:
Dough
Tomato
Cheese
Estimated inventory, June 1, 2016
610
lbs.
230
lbs.
320
lbs.
Desired inventory, June 30, 2016
640
lbs.
220
lbs.
350
lbs.
Price per pound
$1.3
$2.1
$3.3
Prepare June's direct materials purchases budget for Marino's Frozen Pizza Inc. When required, enter unit prices to the nearest cent.
Marino's Frozen Pizza Inc.
Direct Materials Purchases Budget
For the Month Ending June 30, 2016
Dough
Tomato
Cheese
Total
Units required for production:
12" pizza
16" pizza
Total
Total units to be purchased
Unit price
x $
x $
x $
Total direct materials to be purchased
$
$
$
$
Units
12" Pizza
16" Pizza
Budgeted production volume
14,100
20,500
Explanation / Answer
Marino's Frozen Pizza Inc. Direct Materials Purchases Budget For the Month Ending June 30, 2016 Dough Tomato Cheese Total Units required for production: 12" pizza (14,100) 12,690 8,460 11,280 32,430 16" pizza (20,500) 30,750 20,500 26,650 77,900 Total 43,440 28,960 37,930 Total units to be purchased 43,470 28,950 26,680 99,100 Unit price $ 1.30 $ 2.10 $ 3.30 Total direct materials to be purchased $ 56,511 $ 60,795 $ 88,044 205,350 Working Note: 1) Calculation for total units to be purchased: Dough Tomato Cheese Desired inventory, June 30, 2016 640 220 350 Add: Units required for production 43,440 28,960 26,650 44,080 29,180 27,000 Less: Estimated inventory, June 1, 2016 610 230 320 Total direct material to be purchased 43,470 28,950 26,680
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