Question

1. Direct Materials Purchases Budget

   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	16,600		20,900

   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	650	lb.	190	lb.	270	lb.
   Desired inventory, September 30	680	lb.	180	lb.	300	lb.
   Price per pound	$1.40		$2.40		$3.30

   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

Answer-

Lorenzo's Frozen Pizza Inc.
Direct Materials Purchase Budget
For the month ending September 30
Particulars	Dough	Tomato	Cheese	Total
Units required for production:
12" pizza	16600 units*0.80 lb per unit = 13280 lbs	16600 units*0.50 lb per unit =8300 lbs	16600 units*0.70 lb per unit = 11620 lbs	33200
16" pizza	20900 units*1.50 lb per unit = 31350 lbs	20900 units*0.70 lb per unit =14630 lbs	20900 units*1.30 lb per unit = 27170 lbs	73150
Add:-Closing inventory (lb.)	680	180	300	1160
Less:- Beginning Inventory (lb.)	650	190	270	1110
Total units to be purchased (a)	44660	22920	38820	106400
Unit price (b)	$1.40	$2.40	$3.30
Total direct materials to be purchased (c=a*b) $	62524	55008	128106	245638