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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

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:

Backyard Chef

310 units at $700 per unit

Master Chef

150 units at $1,200 per unit

Vermont:

Backyard Chef

240 units at $750 per unit

Master Chef

110 units at $1,300 per unit

New Hampshire:

Backyard Chef

360 units at $750 per unit

Master Chef

180 units at $1,400 per unit

b. Estimated inventories at July 1:

Direct materials:

Grates

290 units

Stainless steel

1,500 lbs.

Burner subassemblies

170 units

Shelves

340 units

Finished products:

Backyard Chef

30 units

Master Chef

32 units

c. Desired inventories at July 31:

Direct materials:

Grates

340 units

Stainless steel

1,800 lbs.

Burner subassemblies

155 units

Shelves

315 units

Finished products:

Backyard Chef

40 units

Master Chef

22 units

d. Direct materials used in production:

In manufacture of Backyard Chef:

Grates

3 units per unit of product

Stainless steel

24 lbs. 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 lbs. 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

$15 per unit

Stainless steel

$6 per lb.

Burner subassemblies

$110 per unit

Shelves

$10 per unit

f. Direct labor requirements:

Backyard Chef:

Stamping Department

0.50 hr. at $17 per hr.

Forming Department

0.60 hr. at $15 per hr.

Assembly Department

1.00 hr. at $14 per hr.

Master Chef:

Stamping Department

0.60 hr. at $17 per hr.

Forming Department

0.80 hr. at $15 per hr.

Assembly Department

1.50 hrs. at $14 per hr.

Required:

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

Backyard Chef

Master Chef

Expected units to be sold

= 310 + 240 + 360

= 910

= 150 + 110 + 180

= 440

Desired inventory, July 31

40

22

Total units available

950

462

Estimated inventory, July 1

Total units to be produced

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

340

1,800

155

315

Total

Estimated inventory, July 1

Total units to be purchased

Unit price

Total direct materials to be purchased

Prepare a direct labor cost budget for July.

Gourmet Grill Company

Direct Labor Cost Budget

For the Month Ending July 31

Stamping Department

Forming Department

Assembly Department

Total

Hours required for production:

Backyard Chef

Master Chef

Total

Hourly rate

$17

$15

$14

Total direct labor cost

=

=

=

=

=

=

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