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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 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.

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 units required 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
Master Chef fill in the blank 38
Plus desired inventory, March 31 fill in the blank 42
Total units required fill in the blank 46
Less estimated inventory, March 1 fill in the blank 50
Total units to be purchased fill in the blank 54
Unit price $fill in the blank 58
Total direct materials to be purchased $fill in the blank 62

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
Master Chef fill in the blank 70 fill in the blank 71
Total hours required fill in the blank 73 fill in the blank 74
Hourly rate $fill in the blank 76 $fill in the blank 77
Total direct labor cost $fill in the blank 79 $fill in the blank 80

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