chap 22 #4

Direct Materials Purchases Budget

Lorenzos 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	12,700		21,600

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	lb. per unit
	Tomato	0.50		0.70
	Cheese	0.70		1.30

In addition, Lorenzos has determined the following information about each material:

	Dough		Tomato		Cheese
Estimated inventory, September 1	540	lb.	160	lb.	370	lb.
Desired inventory, September 30	570	lb.	160	lb.	400	lb.
Price per pound	$1.40		$2.70		$3.30

Prepare September's direct materials purchases budget for Lorenzos Frozen Pizza Inc. When required, enter unit prices to the nearest cent.

Lorenzos 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 1Less desired inventory, September 30Less estimated inventory, September 1Plus desired inventory, September 30Plus estimated inventory, September 1
Total pounds required
Less desired inventory, September 1Less desired inventory, September 30Less estimated inventory, September 1Plus desired inventory, September 30Plus estimated inventory, September 1
Total pounds to be purchased
Unit price (per pound)
Total direct materials to be purchased