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	13,000		20,500

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.	190	lbs.	280	lbs.
Desired inventory, September 30	670	lbs.	180	lbs.	310	lbs.
Price per pound	$1.40		$2.10		$3.30

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

Direct material purchase budget :

	Dough	Tomato	Cheese	total
Units required for production:
12" pizza	11700	7800	10400
16" pizza	30750	20500	26650
Add: Desired ending inventory	670	180	310
Total units available	43120	28480	37360
Less; Beginning inventory	-640	-190	-280
Total units to be purchased	42480	28290	37080
Unit price	1.4	2.1	3.30
Total direct materials to be purchased	59472	59409	122364	241245