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 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:

1.Prepare sales budgetfor July.

Gourmet Grill Company

Sales Budget

For the Month Ending July 31

Product and Area Unit Sales Volume Unit Selling Price Total Sales

Backyard Chef:

Maine __________________ $ ___________________ $________________

Vermont __________________ $ __________________ $ ________________

New Hampshire __________________ $ _________________ $ ________________

Total __________________ $________________

Total Revenue From Sales $________________

2.Prepareproduction 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 31

Units

Backyard Chef Master Chef

___________________________________ ____________units ____________units

___________________________________ ____________units ____________units

___________________________________ ____________units ____________units

____________________________________ ____________units ____________units

_____________________________________ ____________units ____________units

** label either (expected units to be sold, desired inventory, July 31, total units available, estimated inventory, July 1 or total units to be produced)

3.Prepare direct 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 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 ___________ _____________ ______________ _______________

Total ___________ _____________ ______________ _______________

Estimated inventory, July 1 ___________ _____________ ______________ _______________

Total units to be purchased ___________ _____________ ______________ _______________

Unit Price $ __________ $ ___________ $ ____________ $ _____________

Total direct materials to be purchased $ __________ $ _____________ $ _____________ $ _____________ $ ______________

4.Prepare direct labor cost budgetfor 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 $ ____________________ $____________________ $ ______________________

Total direct labor cost $ ____________________ $ ____________________ $ _______________________