Question

# Lorenzo’s Frozen Pizza Inc. has determined from its production budget the following estimated production volumes for...

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 13,400 21,100

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

 Dough Tomato Cheese Estimated inventory, September 1 530 lb. 190 lb. 330 lb. Desired inventory, September 30 560 lb. 180 lb. 360 lb. Price per pound \$1.50 \$2.50 \$3.40

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 Total pounds required Total units to be purchased Unit price x \$ x \$ x \$ Total direct materials to be purchased \$ \$ \$ \$

Direct material purchase budget is prepared after production budget

 Dough Tomato Cheese Total units required for production 12"pizza 10,720(13,400*0.8) 6,700(13,400*0.50) 9,380(13,400*0.7) 26,800 [10,720+6,700+9,380] 16''Pizza 31,650(21,100*1.5) 14,770(21,100*0.7) 27,430(21,100*1.30) 73,850 Add: desired Ending inventory September 30 560 180 360 1,100 Total pounds required 42,930 [10,720+31,650+560] 21,650 [6,700+14,770+180] 37,170[9,380+27,430+360] 101,750 Less: estimated inventory September,1 530 190 330 1,050 Total pounds To be purchased (A) 42,400[42,930-530] 21,460[21,650-190] 36,840[37,170-330] 100,700 Unit price per pound (B) \$1.50 \$2.50 \$3.40 Total AXB \$63,600[42,400*\$1.50] \$53,650[21,460*\$2.50] \$125,256[36,840*\$3.40] \$242,506

#### Earn Coins

Coins can be redeemed for fabulous gifts.