Question

2.

Lorenzo’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	15,000		22,000

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	550	lb.	200	lb.	330	lb.
Desired inventory, September 30	580	lb.	190	lb.	360	lb.
Price per pound	$1.10		$2.40		$3.10

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	?	?	?
?	?	?	?
Total pounds required	?	?	?
?	?	?	?
Total units to be purchased
Unit price	x $ ?	x $ ?	x $ ?
Total direct materials to be purchased	$ ?	$ ?	$ ?	$ ?

Answer 1