Question

# Direct Materials Purchases Budget Lorenzo’s Frozen Pizza Inc. has determined from its production budget the following...

Direct Materials Purchases Budget 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 16,500 25,400 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 1 590 lb. 180 lb. 380 lb. Desired inventory, September 30 620 lb. 170 lb. 410 lb. Price per pound \$1.00 \$2.30 \$3.00 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 30 Total pounds required Less estimated inventory, September 1 Total units to be purchased Unit price x \$ x \$ x \$ Total direct materials to be purchased \$ \$ \$ \$

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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 16500 units*0.80 lb per unit =13200 lbs 16500 units*0.50 lb per unit =8250 lbs 16500 units*0.70 lb per unit =11550 lbs 33000 16" pizza 25400 units*1.50 lb per unit = 38100 lbs 25400 units*0.70 lb per unit =17780 lbs 25400 units*1.30 lb per unit =33020 lbs 88900 Add:-Closing inventory 620 170 410 1200 Less:- Beginning Inventory 590 180 380 1150 Total units to be purchased (a) 51330 26020 44600 121950 Unit price (b) \$1.00 \$2.30 \$3.00 Total direct materials to be purchased (c=a*b) \$ 51330 59846 133800 244976
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