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 16" Pizza Budgeted production volume 15,500 23,900 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: 0.90 lb. per unit 0.60 0.80 12" Pizza Dough Tomato . Cheese In addition, Romano's has determined the following information about each material: 1.50 lbs. per unit 1.00 1.30 Estimated inventory, September 1 Cheese 300 lbs. 330 lbs. Desired inventory, September 30 Price per pound $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. Dough 550 lbs. 580 lbs. $1.40 Tomato 240 lbs. 230 lbs. $2.70
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 16" Pizza Budgeted production volume 15,500 23,900 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: 0.90 lb. per unit 0.60 0.80 12" Pizza Dough Tomato . Cheese In addition, Romano's has determined the following information about each material: 1.50 lbs. per unit 1.00 1.30 Estimated inventory, September 1 Cheese 300 lbs. 330 lbs. Desired inventory, September 30 Price per pound $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. Dough 550 lbs. 580 lbs. $1.40 Tomato 240 lbs. 230 lbs. $2.70
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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Transcribed Image Text: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
Direct materials:
Budgeted production volume
15,500
23,900
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
0.90 lb. per unit
0.60
0.80
Estimated inventory, September 1
Desired inventory, September 30
Price per pound
Dough
Tomato
Cheese
In addition, Romano's has determined the following information about each material:
Units required for production:
12" pizza
16" pizza
Desired inventory, September 30
Total units available
Estimated inventory, September 1
Total units to be purchased
Unit Price
12" Pizza
Total direct materials to be purchased
Feedback
Check My Work
16" Pizza
1.50 lbs. per unit
1.00
✓
1.30
$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
Dough
550 lbs.
580 lbs.
$1.40
Tomato
240 lbs.
230 lbs.
35,850
$2.70
13,950 ✔✔
X
X
X
X
x $ 1.40 x $
✔
$
X
Cheese
$
300 lbs.
330 lbs.
X
23,900 ✓
X
X
1 X
X
2.70 ✔ X $
X
Cheese
12,400 ✓
31,070
X
X
X
X
3.30 ✔
X
Total
X
Remember to take into account materials required for production, desired ending materials inventory and estimated beginning materials inventory when calculating direct materials to be purchased.
Learning Objective 4.
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