Direct Materials Purchases Budget Romano’s Frozen Pizza Inc. has determined from

Question

Direct Materials Purchases Budget Romano’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for September 2016: Units 12" Pizza 16" Pizza Budgeted production volume 5,300 8,900 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 0.70 lb. per unit 1.50 lbs. per unit Tomato 0.40 0.70 Cheese 0.60 1.30 In addition, Romano’s has determined the following information about each material: Dough Tomato Cheese Estimated inventory, September 1, 2016 520 lbs. 200 lbs. 295 lbs. Desired inventory, September 30, 2016 580 lbs. 185 lbs. 315 lbs. Price per pound $0.80 $1.60 $2.40

Prepare September's direct materials purchases budget for Romano’s Frozen Pizza Inc. When required, enter unit prices to the nearest cent.

Explanation / Answer

Direct materials purchases Budget

Dough Tomato Cheese Units of 12" pizzas 5300 5300 5300 Direct material per unit for 12" pizzas 0.70 0.40 0.60 Total direct material for 12" pizzas (A) 3710 2120 3180 Units of 16" pizzas 8900 8900 8900 Direct material per unit of 16" pizzas 1.50 0.70 1.30 Total direct Material por 16" pizzas (B) 13350 6230 11570 Total direct material consumed for both sizes of pizzas (A + B) 17060 8350 14750 + Closing inventory desired 580 185 315 - Opening inventory 520 200 295 Direct material to be purchased 17120 8335 14770 Price per pound 0.80 1.60 2.40 Total purchase price 13696 13336 35448

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