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	13,600		22,100

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	600	lbs.	240	lbs.	280	lbs.
Desired inventory, September 30	630	lbs.	230	lbs.	310	lbs.
Price per pound	$1.00		$2.40		$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
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

Direct Materials Purchases Budget
For the Month Ending September 30
	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	12,240	8,160	10,880	31,280
16" pizza	33,150	22,100	28,730	83,980
Desired inventory, September 30	630	230	310
Total units available	46,020	30,490	39,920	116,430
Estimated inventory, September 1	(600)	(240)	(280)
Total units to be purchased	45,420	30,250	39,640	115,310
Unit Price	$                     1.00	$                     2.40	$               3.20
Total direct materials to be purchased	$             45,420.00	$             72,600.00	$     126,848.00	$     244,868.00