PR 22-2A Sales, production, direct materials purchases, and direct labor cost budgets The budget director of Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July is summarized as follows: a. Estimated sales for July by sales territory. Maine: Backyard Chef Master Chef Vermont: Backyard Chef. Master Chef New Hampshire: Backyard Chef Master Chef ........ b. Estimated inventories at July 1: Direct materials: Grates.... 290 units Stainless steel........ 1,500 lbs. Burner subassemblies.... 170 units Shelves 340 units Finished products: Backyard Chef 30 units 32 units Master Chef........... c. Desired inventories at July 31: Direct materials: Grates unit 310 units at $700 per 150 units at $1,200 per unit 240 units at $750 per unit 110 units at $1,300 per unit Grates Stainless steel........... Burner subassemblies Shelves....... In manufacture of Master Chef: Grates....... Stainless steel........ Burner subassemblies Shelves..... e. Anticipated purchase price for direct materials: Grates........ Stainless steel........ $15 per unit $6 per lb. $10 per unit 360 units at $750 per unit 180 units at $1,400 per unit Burner subassemblies......... $110 per unit Shelves...... f. Direct labor requirements: Backyard Chef: Stamping Department..... Forming Department Assembly Department Master Chef: Stamping Department...... Forming Department 3 units per unit of product 24 lbs. per unit of product 2 units per unit of product 4 units per unit of product 6 units per unit of product 42 lbs. per unit of product 4 units per unit of product 5 units per unit of product 0.50 hr. at $17 per hr. 0.60 hr. at $15 per hr. 1.00 hr. at $14 per hr. 0.60 hr. at $17 per hr. 0.80 hr. at $15 per hr. 1.50 hrs. at $14 per hr. 340 units 1,800 lbs. Assembly Department. Instructions 1. Prepare a sales budget for July. 2. Prepare a production budget for July. 3. Prepare a direct materials purchases budget for July. 4. Prepare a direct labor cost budget for July. Stainless steel...... Burner subassemblies 155 units Shelves 315 units Finished products: Backyard Chef 40 units 22 units Master Chef....... d. Direct materials used in production: In manufacture of Backyard Chef: