Question

Lorenzo’s Frozen Pizza Inc. has determined from its A budget of estimated unit production.production budget the following estimated production volumes for 12'' and 16'' frozen pizzas for September:

	Units
	12" Pizza		16" Pizza
Budgeted production volume	13,300		23,500

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	530	lb.	220	lb.	320	lb.
Desired inventory, September 30	560	lb.	210	lb.	350	lb.
Price per pound	$1.30		$2.60		$3.00

Prepare September's direct materials purchases budget for Lorenzo’s Frozen Pizza Inc. When required, enter unit prices to the nearest cent.

Lorenzo’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
Less desired inventory, September 1 Less desired inventory, September 30 Plus desired inventory, September 1 Plus desired inventory, September 30 Plus estimated inventory, September 1 Plus estimated inventory, September 30
Total pounds required
Less desired inventory, September 1 Less desired inventory, September 30 Less estimated inventory, September 1 Less estimated inventory, September 30 Plus estimated inventory, September 1 Plus estimated inventory, September 30
Total units to be purchased
Unit price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

• Requirement

Direct Materials Purchases Budget
For the Month Ending September 30
	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	10,640	6,650	9,310	26,600
16" pizza	35,250	16,450	30,550	82,250
Desired inventory, Sept 30	560	210	350
Total units available	46,450	23,310	40,210	109,970
Less: Estimated inventory, Sept 1	530	220	320
Total units to be purchased	45,920	23,090	39,890	108,900
Unit Price	$                     1.30	$                     2.60	$                                    3.00
Total direct materials to be purchased	$             59,696.00	$             60,034.00	$                          119,670.00	$     239,400.00