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 March is summarized as follows:

a. Estimated sales for March by sales territory:

Maine:
Backyard Chef	350 units at $800 per unit
Master Chef	200 units at $1,400 per unit
Vermont:
Backyard Chef	400 units at $825 per unit
Master Chef	240 units at $1,500 per unit
New Hampshire:
Backyard Chef	320 units at $850 per unit
Master Chef	200 units at $1,600 per unit

b. Estimated inventories at March 1:

Direct materials:
Grates	320 units
Stainless steel	1,700 lb.
Burner subassemblies	190 units
Shelves	350 units
Finished products:
Backyard Chef	30 units
Master Chef	36 units

c. Desired inventories at March 31:

Direct materials:
Grates	300 units
Stainless steel	1,500 lb.
Burner subassemblies	210 units
Shelves	400 units
Finished products:
Backyard Chef	40 units
Master Chef	26 units

d. Direct materials used in production:

In manufacture of Backyard Chef:
Grates	3 units per unit of product
Stainless steel	24 lb. per unit of product
Burner subassemblies	2 units per unit of product
Shelves	4 units per unit of product
In manufacture of Master Chef:
Grates	6 units per unit of product
Stainless steel	42 lb. per unit of product
Burner subassemblies	4 units per unit of product
Shelves	5 units per unit of product

e. Anticipated purchase price for direct materials:

Grates	$16 per unit
Stainless steel	$8 per lb.
Burner subassemblies	$120 per unit
Shelves	$12 per unit

f. Direct labor requirements:

Backyard Chef:
Stamping Department	0.50 hr. at $18 per hr.
Forming Department	0.60 hr. at $16 per hr.
Assembly Department	1.0 hr. at $15 per hr.
Master Chef:
Stamping Department	0.60 hr. at $18 per hr.
Forming Department	0.80 hr. at $16 per hr.
Assembly Department	1.50 hrs. at $15 per hr.

1. Prepare a sales budget for March. Gourmet Grill Company Sales Budget For the Month Ending March 31 Product and Area Unit Sales Volume Unit Selling Price Total Sales Backyard Chef: Maine Vermont New Hampshire Total Master Chef: Maine Vermont New Hampshire Total Total revenue from sales 2. Prepare a production budget for March. Gourmet Grill Company Production Budget For the Month Ending March 31 Units Backyard Chef Master Chef Expected units to be sold Plus desired inventory, March 31 Total Less estimated inventory, March 1 Total units to be produced 3. Prepare a direct materials purchases budget for March. Gourmet Grill Company Direct Materials Purchases Budget For the Month Ending March 31 Grates (units) Stainless Steel (lb.) Burner Sub- assemblies (units) Shelves (units) Total Required units for production: Backyard Chef Master Chef Plus desired inventory, March 31 Total Less estimated inventory, March 1 Total units to be purchased Unit price Total direct materials to be purchased 4. Prepare a direct labor cost budget for March. Gourmet Grill Company Direct Labor Cost Budget For the Month Ending March 31 Stamping Department Forming Department Assembly Department Total Hours required for production: Backyard Chef Master Chef Total Hourly rate Total direct labor cost