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	15,900		25,900

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	0.90	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	540	lbs.	220	lbs.	290	lbs.
Desired inventory, June 30, 2016	570	lbs.	210	lbs.	320	lbs.
Price per pound	$1.5		$2.3		$3.4

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	$	$	$	$

Answer 1

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	14310	9540	12720
16" pizza	38850	25900	33670
Add: Desired inventory, June 30, 2016	570	210	320
Total	53730	35650	46710
Less: Estimated inventory, June 1, 2016	540	220	290
Total units to be purchased	53190	35430	46420
Unit price	1.5	2.3	3.4
Total direct materials to be purchased	79785	81489	157828	319102