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 14,200 21,000 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, Lorenzo’s has determined the following information about each material: Dough Tomato Cheese Estimated inventory, September 1 610 lb. 200 lb. 380 lb. Desired inventory, September 30 640 lb. 190 lb. 410 lb. Price per pound $1.20 $2.30 $3.40 Prepare September's direct materials purchases budget for Lorenzo’s Frozen Pizza Inc. When required, enter unit prices to the nearest cent.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Direct Materials Purchases Budget
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 | 14,200 | 21,000 |
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, Lorenzo’s has determined the following information about each material:
| Dough | Tomato | Cheese | ||||
| Estimated inventory, September 1 | 610 | lb. | 200 | lb. | 380 | lb. |
| Desired inventory, September 30 | 640 | lb. | 190 | lb. | 410 | lb. |
| Price per pound | $1.20 | $2.30 | $3.40 |
Prepare September's direct materials purchases budget for Lorenzo’s Frozen Pizza Inc. When required, enter unit prices to the nearest cent.
![**Prepare September's Direct Materials Purchases Budget for Lorenzo’s Frozen Pizza Inc.**
### 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** | $[___] | $[___] | $[___] | $[___] |
This table provides a format for planning the purchases of dough, tomato, and cheese, essential ingredients for producing 12" and 16" pizzas. Fill in the respective fields to calculate the total pounds required, units to be purchased, and the total cost based on unit prices for each ingredient.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa57c9261-be87-4739-9b11-83c401f4f7d1%2F03b4ede6-3bd1-4eb8-bc03-cd147fb6a12d%2Fyw57rol_processed.png&w=3840&q=75)
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