Question

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	13,600		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	590	lbs.	240	lbs.	360	lbs.
Desired inventory, September 30	620	lbs.	230	lbs.	390	lbs.
Price per pound	$1.20		$2.80		$3.10

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
Desired inventory, September 30
Total units available
Estimated inventory, September 1
Total units to be purchased
Unit Price	x $	x $	x $
Total direct materials to be purchased	$	$	$	$

Answer 1

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	12240	8160	10880	31280
16" pizza	30750	20500	26650	77900
Desired inventory, September 30	620	230	390	1240
Total units available	43610	28890	37920	110420
Estimated inventory, September 1	590	240	360	1190
Total units to be purchased	43020	28650	37560	109230
Unit Price	1.2	2.8	3.1
Total direct materials to be purchased	51624	80220	116436	248280

4 1 Romano's Frozen Pizza Inc. 2 Direct Materials Purchases Budget 3 For the Month Ending September 30 Dough Tomato Cheese Total 5 Units required for production: 6 12" pizza =13600*0.9 =13600*0.6 =13600*0.8 =SUM(B6:D6) 7 16" pizza =20500*1.5 =20500*1 =20500*1.3 =SUM(B7:07) 8 Desired inventory, September 30 620 230 390 =SUM(B8:08) 9 Total units available =SUM(B6:38) I=SUM(C6:08) =SUM(D6:08) =SUM(B9:09) 10 Estimated inventory, September 1 590 240 =SUM(B10:010) 11 Total units to be purchased =B9-B10 =C9-C10 =D9-D10 =SUM(B11:D11) 12 Unit Price 1.2 2.8 3.1 13 Total direct materials to be purchased =B11*B12 =C11*C12 =D11*D12 =SUM(B13:D13) 360