Question

This company makes one size of frozen pizza. There were 20,000 pizzas expected to be produced from the production budget. Each pizza uses 1 pound (lbs.) of Dough, 0.5 (1/2) pounds of Cheese and 0.5 (1/2) pounds of Tomatoes. Dough costs $1 per pound, Cheese costs $2 per pound and Tomatoes cost $3 per pound.  

Inventory information:

Material	Estimated Beginning Inv.	Desired Ending Inv
Dough	100 lbs	400 lbs.
Cheese	100	200
Tomato	100	200

Create the Direct Materials Purchasing Budget (select from each drop down box):

Direct Materials Purchasing Budget
	Dough	Cheese	Tomato	Total
Pounds (lbs) required for production
Expected pizzas to be produced	Choose...20,00012,50010,00015,000	Choose...20,00012,50010,00015,000	Choose...20,00012,50010,00015,000
x pounds per unit	1.00.5	1.00.5	1.00.5
Total pounds required for units produced	Choose...20,00012,50010,00015,000	Choose...20,00012,50010,00015,000	Choose...20,00012,50010,00015,000
+ Desired ending inv	100200300500400	100200300500400	100200300500400
- Estimated beginning inv	100200300500400	100200300500400	100200300500400
Total pounds to be purchased	Choose...9,90010,10020,30019,700	Choose...9,90010,10020,30019,700	Choose...9,90010,10020,30019,700
x Cost per pound $	1.002.003.00	1.002.003.00	1.002.003.00
Total cost of direct materials to be purchased $	Choose...20,20019,80020,30019,00070,80030,300	Choose...20,20019,80020,30019,00070,80030,300	Choose...20,20019,80020,30019,00070,80030,300	Choose...20,20019,80020,30019,00070,80030,300

Answer 1

Direct Materials Purchases Budget:

	Dough	Cheese	Tomato	Total
Pounds Required for Production
Expected Pizzas to be Produced	20,000	20,000	20,000
x Pounds per Unit	1	0.5	0.5
Total Pounds Required for Units Produced	20,000	10,000	10,000
+ Desired Ending Inventory	400	200	200
- Estimated Beginning Inventory	100	100	100
Total Pounds to be Purchased	20,300	10,100	10,100
x Cost per Pound	$ 1	$ 2	$ 3
Total Cost of Direct Materials to be Purchased	$ 20,300	$ 20,200	$ 30,300	$ 70,800