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.

Required:

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	fill in the blank 1	fill in the blank 2	fill in the blank 3
	Vermont	fill in the blank 4	fill in the blank 5	fill in the blank 6
	New Hampshire	fill in the blank 7	fill in the blank 8	fill in the blank 9
	Total	fill in the blank 10		fill in the blank 11
Master Chef:
	Maine	fill in the blank 12	fill in the blank 13	fill in the blank 14
	Vermont	fill in the blank 15	fill in the blank 16	fill in the blank 17
	New Hampshire	fill in the blank 18	fill in the blank 19	fill in the blank 20
	Total	fill in the blank 21		fill in the blank 22
Total revenue from sales				fill in the blank 23

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	fill in the blank 24	fill in the blank 25
Plus desired inventory, March 31	fill in the blank 26	fill in the blank 27
Total	fill in the blank 28	fill in the blank 29
Less estimated inventory, March 1	fill in the blank 30	fill in the blank 31
Total units to be produced	fill in the blank 32	fill in the blank 33

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	fill in the blank 34	fill in the blank 35	fill in the blank 36	fill in the blank 37
Master Chef	fill in the blank 38	fill in the blank 39	fill in the blank 40	fill in the blank 41
Plus desired inventory, March 31	fill in the blank 42	fill in the blank 43	fill in the blank 44	fill in the blank 45
Total	fill in the blank 46	fill in the blank 47	fill in the blank 48	fill in the blank 49
Less estimated inventory, March 1	fill in the blank 50	fill in the blank 51	fill in the blank 52	fill in the blank 53
Total units to be purchased	fill in the blank 54	fill in the blank 55	fill in the blank 56	fill in the blank 57
Unit price	fill in the blank 58	fill in the blank 59	fill in the blank 60	fill in the blank 61
Total direct materials to be purchased	fill in the blank 62	fill in the blank 63	fill in the blank 64	fill in the blank 65	fill in the blank 66

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		fill in the blank 67		fill in the blank 68		fill in the blank 69
	Master Chef		fill in the blank 70		fill in the blank 71		fill in the blank 72
	Total		fill in the blank 73		fill in the blank 74		fill in the blank 75
Hourly rate			$fill in the blank 76		$fill in the blank 77		$fill in the blank 78
Total direct labor cost			$fill in the blank 79		$fill in the blank 80		$fill in the blank 81	$fill in the blank 82