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	16,600		24,800

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	600	lbs.	200	lbs.	330	lbs.
Desired inventory, September 30	630	lbs.	190	lbs.	360	lbs.
Price per pound	$1.30		$2.20		$3.20

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

Romaro's Frozen Pizza Inc.
Direct Materials Budget
For the months ending September 30
	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	16,600	16,600	16,600
16" pizza	24,800	24,800	24,800
Materials requirement per unit:
12" pizza	0.90	0.60	0.80
16" pizza	1.50	1.00	1.30
Materials needed for production:
12" pizza	14,940	9,960	13,280
16" pizza	37,200	24,800	32,240
Total materials requirement	52,140	34,760	45,520
Add:Budgeted ending inventory	630	190	360
Total materials requirement	52,770	34,950	45,880
Less:Budgeted beginning inventory	(600)	(200)	(330)
Materials to be purchased	52,170	34,750	45,550
Units Price	$                            1.30	$                  1.20	$                     3.20
Total Direct materials to be purchased	$                        67,821	$              41,700	$              1,45,760	$                   2,55,281