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: 310 units at $700 Backyard Chef per unit 150 units at Master Chef $1,200 per unit Vermont: 240 units at $750 Backyard Chef per unit Master Chef 110 units at $1,300 per unit New Hampshire: 360 units at $750 Backyard Chef per unit Master Chef 180 units at $1,400 per unit b. Estimated inventories at July 1: Direct materials: Grates 290 units 1,500 Stainless steel lbs. 170 units 340 units 30 units Burner subassemblies Shelves Finished products: Backyard Chef Master Chef c. Desired inventories at July 31: Direct materials: Grates 32 units 340 units Stainless steel 1,800 lbs. 155 units 315 units Burner subassemblies Shelves Finished products: Backyard Chef 40 units 22 units Master Chef d. Direct materials used in production: In manufacture of Backyard Chef: Grates Stainless steel 3 units per unit of product 24 lbs. per unit of product 2 units per unit of product 4 units per unit of product Burner subassemblies Shelves In manufacture of Master Chef: Grates Stainless steel 6 units per unit of product 42 lbs. per unit of product 4 units per unit of product 5 units per unit of product Burner subassemblies Shelves e. Anticipated purchase price for direct materials: Grates Stainless steel Burner subassemblies Shelves f. Direct labor requirements: $15 per unit $6 per lb. $110 per unit $10 per unit Backyard Chef: Stamping Department 0.50 hr. at $17 per hr. 0.60 hr. at $15 Forming Department per hr. Assembly Department 1.00 hr. at $14 per hr. Master Chef: 0.60 hr. at $17 Stamping Department per hr. 0.80 hr. at $15 Forming Department per hr. 1.50 hrs. at $14 Assembly Department per hr. Required: 1. Prepare a sales budget for July. Gourmet Grill Company Sales Budget For the Month Ending July 31 Unit Sales Unit Selling Product and Area Volume Price Total Sales Backyard Chef: $ Maine $ Vermont New Hampshire Total TA Master Chef: $ Maine $ Vermont New Hampshire Total $ Total revenue from sales 2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Gourmet Grill Company Production Budget For the Month Ending July 31 Units Master Backyard Chef Chef Expected units to be sold Desired inventory, July 31 Total units available Estimated inventory, July 1 Total units to be produced 3. Prepare a direct materials purchases budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Gourmet Grill Company Direct Materials Purchases Budget For the Month Ending July 31 Grates (units) Stainless Steel (lbs.) Burner Sub- assemblies (units) Shelves (units) Total Required units for production: Backyard Chef Master Chef Desired inventory, July 31 Total Estimated inventory, July 1 Total units to be purchased Unit price Total direct materials to be purchased 4. Prepare a direct labor cost budget for July. Gourmet Grill Company Direct Labor Cost Budget For the Month Ending July 31 Stamping Forming Assembly Department Department Department Total Hours required for production: Backyard Chef Master Chef Total $ $ $ Hourly rate $ $ $ $ Total direct labor cost
