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	13,400		26,900

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	520	lbs.	180	lbs.	290	lbs.
Desired inventory, September 30	550	lbs.	170	lbs.	320	lbs.
Price per pound	$1.50		$2.60		$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
Estimated inventory, September 30
Total units available
Total units to be purchased
Unit Price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

Solution

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	12060	8040	10720	30820
16" pizza	40350	26900	34970	102220
Desired ending inventory	550	170	320	1040
Total pounds required	52960	35110	46010	134080
Less: Beginning inventory	520	180	290	990
Total units to be purchased	52440	34930	45720	133090
Unit price	$        1.50	$           2.60	$           3.10
Total direct materials to be purchased	$78,660.00	$   90,818.00	$ 141,732.00	$311,210.00