Lorenzo's Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for 12
Question:
Lorenzo'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.......................12,500..........21,800
Three direct materials are 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..............................0.80 lb. per unit..........1.50 lb. per unit
Tomato...........................................0.50........................0.70
Cheese............................................0.70........................1.30
In addition, Lorenzo's has determined the following information about each material:
Dough Tomato Cheese
Estimated inventory, September......1 490 lb...........230 lb..........275 lb.
Desired inventory, September........30 580 lb...........185 lb..........340 lb.
Price per pound.............................$0.50............$2.20............$2.60
Prepare September's direct materials purchases budget for Lorenzo's Frozen Pizza Inc.
Step by Step Answer:
Accounting
ISBN: 978-1337899451
27th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac