Marino\'s Frozen Pizza Inc. has determined from its production budget the follow

Question

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:

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:

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

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

Explanation / Answer

Solution: 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 12690 8460 11280 16" pizza 38400 25600 33280 Total 51090 34060 44560 Total units to be purchased 51120 34050 44590 Unit price x $1.4 x $2.3 x $3.40 Total direct materials to be purchased $71,568 $78,315 $151,606 $301,489 Working Notes: For the budgeted production, required material is given below 12" pizza Total material required 16" pizza Total material required Budgeted production volume 14100 25600 Dough required 0.9 per unit =14,100 x 0.90 =12,690 1.5 per unit =25,600 x 1.5 =38,400 Tomato 0.60 per unit =14,100 x0.60 =8,460 1 per unit =25,600 x 1 =25,600 Cheese 0.80 per unit =14,100 x0.80 =11,280 1.30 per unit =25,600 x 1.30 =33,280 Computation of units required to be purchased and price Dough Tomato Cheese Desired inventory, June 30, 2016 570 170 350 Add: Units required for production: 51090 34060 44560 as calculated above Less: Estimated inventory, June 1, 2016 540 180 320 Units required to be purchased 51120 34050 44590 Unit price of materials 1.4 2.3 3.4 Total direct materials to be purchased 71568 78315 151606 [unit price x units required] 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 12690 8460 11280 16" pizza 38400 25600 33280 Total 51090 34060 44560 a Total units to be purchased 51120 34050 44590 b Unit price x $1.4 x $2.3 x $3.40 c=a xb Total direct materials to be purchased $71,568 $78,315 $151,606 $301,489

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