CH $8$ Homework $($Application$)$

Direct materials purchases budget

Tobin's Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for $12"$ and $16"$ frozen pizzas for November:

$\backslash$table$[[,$Units $12"$ Pizza Units $16"$ Pizza,$],[$Budgeted production volume,$83,000,63,000]]$

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

$0\mathrm{.}55lb.$ per unit

$0\mathrm{.}80lb.$ per unit

Tomato

$0\mathrm{.}25$

$0\mathrm{.}40$

Cheese

$0\mathrm{.}70$

$1\mathrm{.}20$

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

$\backslash$table$[[,$Dough,Tomato,Cheese$],[$Estimated inventory, November $1,2,500lbs.,1,200lbs.,3,000lbs.],[$Desired inventory, November $30,1,900lbs.,1,200lbs.,2,500lbs.],[$Price per pound,$$0\mathrm{.}50,$$$0\mathrm{.}60,$$$0\mathrm{.}85$