Question

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	13,100		21,100

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	570	lbs.	180	lbs.	320	lbs.
Desired inventory, September 30	600	lbs.	170	lbs.	350	lbs.
Price per pound	$1.00		$2.50		$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
Desired inventory, September 30
Total units available
Estimated inventory, September 1
Total units to be purchased
Unit Price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

• All working forms part of the answer

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	11,790 [13100 x 0.90]	7,860 [13100 x 0.60]	10,480 [13100 x 0.80]	30,130
16" pizza	31,650 [21100 x 1.50]	21,100 [21100 x 1.00]	27,430 [21100 x 1.30]	80,180
Desired inventory, September 30	600	170	350	350
Total units available	32,250	21,270	27,780	80,530
Estimated inventory, September 1	570	180	320	570
Total units to be purchased	31,680	21,090	27,460	79,960
Unit Price	$               1.00	$               2.50	$              3.10
Total direct materials to be purchased	$       31,680.00	$       52,725.00	$      85,126.00	$   169,531.00