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

1.00 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.