Sales, Production, Direct Materials Purchases, andDirect Labor Cost Budgets

Thebudgetdirector 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 Chef310 units at $700 per unitMaster Chef150 units at $1,200 per unitVermont:Backyard Chef240 units at $750 per unitMaster Chef110 units at $1,300 per unitNew Hampshire:Backyard Chef360 units at $750 per unitMaster Chef180 units at $1,400 per unit

b. Estimated inventories at July 1:

Direct materials:Grates290 unitsStainless steel1,500 lbs.Burner subassemblies170 unitsShelves340 unitsFinished products:Backyard Chef30 unitsMaster Chef32 units

c. Desired inventories at July 31:

Direct materials:Grates340 unitsStainless steel1,800 lbs.Burner subassemblies155 unitsShelves315 unitsFinished products:Backyard Chef40 unitsMaster Chef22 units

d. Direct materials used in production:

In manufacture of Backyard Chef:Grates3 units per unit of productStainless steel24 lbs. per unit of productBurner subassemblies2 units per unit of productShelves4 units per unit of productIn manufacture of Master Chef:Grates6 units per unit of productStainless steel42 lbs. per unit of productBurner subassemblies4 units per unit of productShelves5 units per unit of product

e. Anticipated purchase price for direct materials:

Grates$15 per unitStainless steel$6 per lb.Burner subassemblies$110 per unitShelves$10 per unit

f. Direct labor requirements:

Backyard Chef:Stamping Department0.50 hr. at $17 per hr.Forming Department0.60 hr. at $15 per hr.Assembly Department1.00 hr. at $14 per hr.Master Chef:Stamping Department0.60 hr. at $17 per hr.Forming Department0.80 hr. at $15 per hr.Assembly Department1.50 hrs. at $14 per hr.

Required:

1.Prepare asales budgetfor July.

Gourmet Grill Company

Sales Budget

For the Month Ending July 31Product and AreaUnit Sales

VolumeUnit Selling

PriceTotal SalesBackyard Chef:Maine$$VermontNew HampshireTotal$Master Chef:Maine$$VermontNew HampshireTotal$Total revenue from sales$

2.Prepareaproduction budgetfor 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 31UnitsBackyard ChefMaster Chef

3.Prepare adirect materials purchases budgetfor 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 31Grates

(units)Stainless Steel

(lbs.)Burner Sub-

assemblies

(units)Shelves

(units)TotalRequired units for production:Backyard ChefMaster ChefDesired inventory, July 31TotalEstimated inventory, July 1Total units to be purchasedUnit price$$$$Total direct materials to be purchased$$$$$

4.Prepare adirect labor cost budgetfor July.

Gourmet Grill Company

Direct Labor Cost Budget

For the Month Ending July 31Stamping

DepartmentForming DepartmentAssembly DepartmentTotalHours required for production:Backyard ChefMaster ChefTotalHourly rate

$$$Total direct labor cost$$$$