Question

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	13,900		26,600

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	lbs. 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	520	lbs.	230	lbs.	340	lbs.
Desired inventory, September 30	550	lbs.	220	lbs.	370	lbs.
Price per pound	$1.10		$2.80		$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
Total pounds required
Total units to be purchased
Unit price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

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	11120	6950	9730
16" pizza	39900	18620	34580
Add: Desired inventory, September 30	550	220	370
Total pounds required	51570	25790	44680
Less: Estimated inventory, September 1	520	230	340
Total units to be purchased	51050	25560	44340
Unit price	1.1	2.8	3.3
Total direct materials to be purchased	56155	71568	146322	274045