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	76,000		56,000

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.	1,000	lbs.	3,300	lbs.
Desired inventory, November 30	2,100	lbs.	1,000	lbs.	2,700	lbs.
Price per pound	$0.60		$0.70		$0.95

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Open spreadsheet

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

Answer :-

Preparation of November's direct material purchases budget for Tobin's Frozen Pizza Inc. .

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	41,800	19,000	53,200
16" pizza	44,800	22,400	67,200
Add: Desired inventory, November 30	2100	1000	2700
Total units available ( Units required for production + desired inventory, November 30)	88700	42400	123100
Less: Estimated inventory, November 1	- 2200	- 1000	- 3300
Total units to be purchased ( Total units available - estimated inventory, November 1) (a)	86500	41400	119800
Unit Price per pound (b)	$ 0.60	$ 0.70	$ 0.95
Total direct materials to be purchased (a × b)	$51900	$28980	$113810	$194690

Notes:

1. Units required for production:

Direct material for 12" Pizza = Budgeted Production volume × Direct material lb. Per unit

For Dough = 76000 × 0.55

= 41,800

For Tomato = 76000 × 0.25

= 19000

For Cheese = 76000 × 0.70

= 53200

2.

Direct material for 16" Pizza = Budgeted Production volume × Direct material lb. Per unit

For Dough = 56000 × 0.80

= 44800

For Tomato = 56000 × 0.40

=22400

For Cheese = 56000 × 1.20

= 67200