Sales, Production, Direct Materials Purchases, and Direct Labor Cost BudgetsThe 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 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 unitb. Estimated inventories at July 1:Direct materials:Grates290 unitsStainless steel 1,500 lbs. Burner subassemblies170 unitsShelves340 unitsFinished products:Backyard Chef30 unitsMaster Chef32 unitsc. Desired inventories at July 31:Direct materials:Grates340 unitsStainless steel 1,800 lbs. Burner subassemblies155 unitsShelves315 unitsFinished products:Backyard Chef40 unitsMaster Chef22 unitsd. 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 producte. Anticipated purchase price for direct materials:Grates$15 per unitStainless steel $6 per lb. Burner subassemblies$110 per unitShelves$10 per unitf. 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 a sales budget for July. Gourmet Grill CompanySales BudgetFor the Month Ending July 31Unit Sales Unit SellingProduct and AreaTotal SalesVolumePriceBackyard Chef:MaineVermontNew HampshireTotalMaster Chef:MaineVermontNew HampshireTotalTotal revenue from sales2. Prepare a production budget for July. For those boxes in which you must enter subtracted or negative numbers use a minus sign.Gourmet Grill CompanyProduction BudgetFor the Month Ending July 31UnitsBackyardMasterChefChefExpected units to be sold vDesired inventory, July 31 vTotal units available vEstimated inventory, July 1 vTotal units to be produced V3. 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 CompanyDirect Materials Purchases BudgetFor the Month Ending July 31Burner Sub-GratesStainless SteelShelvesassembliesTotal(units)(Ibs.)(units)(units)Required units for production:Backyard ChefMaster ChefDesired inventory, July 31TotalEstimated inventory, July 1Total units to be purchasedUnit priceTotal direct materials to be purchased$4. Prepare a direct labor cost budget for July.Gourmet Grill CompanyDirect Labor Cost BudgetFor the Month Ending July 31StampingFormingAssemblyTotalDepartment Department DepartmentHours required for production:Backyard ChefMaster ChefTotalHourly rateTotal direct labor cost

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Answered: Sales, Production, Direct Materials…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter22: Budgeting

Section: Chapter Questions

Problem 2PA: Sales, production, direct materials purchases, and direct labor cost budgets The budget director of...

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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 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 a sales budget for July.

Gourmet Grill Company
Sales Budget
For the Month Ending July 31
Unit Sales Unit Selling
Product and Area
Total Sales
Volume
Price
Backyard Chef:
Maine
Vermont
New Hampshire
Total
Master Chef:
Maine
Vermont
New Hampshire
Total
Total revenue from sales
2. 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
Master
Chef
Chef
Expected units to be sold v
Desired inventory, July 31 v
Total units available v
Estimated inventory, July 1 v
Total units to be produced V
3. 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
Burner Sub-
Grates
Stainless Steel
Shelves
assemblies
Total
(units)
(Ibs.)
(units)
(units)
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 a direct labor cost budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping
Forming
Assembly
Total
Department Department Department
Hours required for production:
Backyard Chef
Master Chef
Total
Hourly rate
Total direct labor cost

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