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Homework answers / question archive / Direct Materials Purchases Budget Romano’s Frozen Pizza Inc

Direct Materials Purchases Budget Romano’s Frozen Pizza Inc

Accounting

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:

  Units
  12" Pizza 16" Pizza
Budgeted production volume 14,900   24,000  

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 0.90 lb. per unit 1.50 lbs. per unit
  Tomato 0.60   1.00  
  Cheese 0.80   1.30  

In addition, Romano's has determined the following information about each material:

  Dough Tomato Cheese
Estimated inventory, September 1 600 lbs. 220 lbs. 270 lbs.
Desired inventory, September 30 630 lbs. 210 lbs. 300 lbs.
Price per pound $1.00   $2.80   $3.30  

Prepare September's direct materials purchases budget for Romano’s Frozen Pizza Inc. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

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

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Answer

  • Requirements asked
 

Direct Materials Purchases Budget
 

For the Month Ending September 30
   

Dough

Tomato

Cheese

Total
 

Units required for production:

        

A

12" pizza

                     13,410

                      8,940

                                    11,920

               34,270

B

16" pizza

                     36,000

                    24,000

                                    31,200

               91,200

C

Desired inventory, Nov 30

                         630

                         210

                                         300

  

D = A+B+C

Total units available

                     50,040

                    33,150

                                    43,420

             126,610

E

Estimated inventory, Nov 1

                        (600)

                        (220)

                                        (270)

  

F= D - E

Total units to be purchased

                     49,440

                    32,930

                                    43,150

             125,520

G

Unit Price

$                     1.00

$                     2.80

$                                     3.30

  

H = F x G

Total direct materials to be purchased

$             49,440.00

$             92,204.00

$                           142,395.00

$      284,039.00

 

  • Note
 

Dough

Tomato

Cheese

Units required for production:

      

12" pizza

=14900*0.9

=14900*0.6

=14900*0.8

16" pizza

=24000*1.5

=24000*1

=24000*1.3

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