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	15,700		24,600

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	640	lbs.	220	lbs.	370	lbs.
Desired inventory, September 30	670	lbs.	210	lbs.	400	lbs.
Price per pound	$1.30		$2.30		$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
Total units available
Total units to be purchased
Unit Price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

Romano’s Frozen Plaza Inc.
Direct Materials Purchase Budget
For the month ending September 30
	Dough	Tomato	Cheese	Total
Units required for production:
12” pizza	15700*0.90 =14130 lbs	15700*0.60 =9420 lbs	15700*0.80 =12560 lbs
16” pizza	24600*1.50 =36900 lbs	24600*1.00 =24600 lbs	24600*1.30 =31980 lbs
	51030 lbs	34020 lbs	44540 lbs
Total units available	640 lbs	220 lbs	370 lbs
Total units required at the month end	670 lbs	210 lbs	400 lbs
Total units to be purchased	51030+670-640 =51060	34020+210-220 =34010	44540+400-370 =44570
Unit Price	$ 1.30	$ 2.30	$ 3.20
Total Materials to be purchased	$ 66378	$ 78223	$ 142624	$ 287225