Question

#2

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
	12" Pizza		16" Pizza
Budgeted production volume	15,300		21,700

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	0.90	lb. per unit	1.50	lbs. per unit
	Tomato	0.60		1.00
	Cheese	0.80		1.30

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

	Dough		Tomato		Cheese
Estimated inventory, September 1	590	lbs.	220	lbs.	300	lbs.
Desired inventory, September 30	620	lbs.	210	lbs.	330	lbs.
Price per pound	$1.10		$2.30		$3.10

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	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

Romano’s Frozen Pizza Inc.
Direct Materials Purchases Budget
For the Month Ending September 30
	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	13770	9180	12240	35190
16" pizza	32550	21700	28210	82460
Add: Desired ending Inventory	620	210	330	1160
Total units available	590	220	300	1110
Total units to be purchased	46350	30870	40480	117700
Unit Price	$ 1.10	$ 2.30	$ 3.10
Total direct materials to be purchased	$       50,985.00	$ 71,001.00	$ 125,488.00	$247,474.00

Working

	Romano’s Frozen Pizza Inc.
	Direct Materials Purchases Budget
	For the Month Ending September 30
		Dough	Tomato	Cheese	Total
	Units required for production:
A	12" pizza	13770	9180	12240	35190
B	16" pizza	32550	21700	28210	82460
C	Add: Desired ending Inventory	620	210	330	1160
D	Total units available	590	220	300	1110
E=A+B+C-D	Total units to be purchased	46350	30870	40480	117700
F	Unit Price	$ 1.10	$ 2.30	$ 3.10
G=E x F	Total direct materials to be purchased	$       50,985.00	$ 71,001.00	$ 125,488.00	$247,474.00