Question

Direct Materials Purchases Budget

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	70,000		50,000

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	lb. 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	2,500	lbs.	1,000	lbs.	3,000	lbs.
Desired inventory, November 30	2,000	lbs.	1,200	lbs.	2,800	lbs.
Price per pound	$0.50		$0.60		$0.85

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.

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
16" pizza
Desired inventory, November 30
Total units available
Estimated inventory, November 1
Total units to be purchased
Unit Price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

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.

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	38500	17500	49000
16" pizza	40000	20000	60000
Desired inventory, November 30	2000	1200	2800
Total units available	80500	38700	111800
Estimated inventory, November 1	-2500	-1000	-3000
Total units to be purchased	78000	37700	108800
Unit Price	x $0.50	x $0.60	x $0.85
Total direct materials to be purchased	$39000	$22620	$92480	$154100