Question

Tobin’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for November:

	Units
	12" Pizza		16" Pizza
Budgeted production volume	57,000		37,000

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	0.55	lb. per unit	0.80	lbs. per unit
	Tomato	0.25		0.40
	Cheese	0.70		1.20

In addition, Tobin’s has determined the following information about each material:

	Dough		Tomato		Cheese
Estimated inventory, November 1	2,200	lbs.	1,200	lbs.	2,700	lbs.
Desired inventory, November 30	1,800	lbs.	1,500	lbs.	2,600	lbs.
Price per pound	$0.60		$0.70		$0.95

Prepare November's direct materials purchases budget for Tobin’s Frozen Pizza Inc. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Round your final answers to the nearest dollar.

Tobin’s Frozen Pizza Inc.
Direct Materials Purchases Budget
For the Month Ending November 30
	Dough		Tomato		Cheese		Total
Units required for production:
12" pizza
16" pizza
Total units available
Total units to be purchased
Unit price	x	$	x	$	x	$
Total direct materials to be purchased		$		$		$		$

Answer 1

Tobin’s Frozen Pizza Inc. Direct Materials Purchases Budget For the Month Ending November 30
	Direct Materials	Direct Materials	Direct Materials
	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	31,350 (57,000 x $ 0.55)	14,250 (57,000 x $ 0.25)	39,900 (57,000 x $ 0.70)
16" pizza	29,600 (37,000 x $ 0.80)	14,800 (37,000 x $ 0.40)	44,400 (37,000 x $ 1.20)
Desired inventory, November 30	1,800	1,500	2,600
Total units available	62,750	30,550	86,900
Estimated inventory, November 1	-2,200	-1,200	-2,700
Total units to be purchased	60,550	29,350	84,200
x Unit Price	$ 0.60	$ 0.70	$ 0.95
Total direct materials to be purchased	$ 36,330	$ 20,545	$ 79,990	$ 136,865