Question

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 Product and Area Unit Sales Volume Unit Selling Price Total Sales 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 Chef Master Chef 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 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 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 $ $ $ Total direct labor cost $ $ $ $

Answer 1

Answer Page No 0 O sales budget for Jelly unit sales volume Price 310 150 Particular Total sales Maine Backyard chet #700 6214,000 Master chef $1200 $180,000 Total $397000 Vermont Back yard chet 240 $750 $180,000 Master chef 110 $1300 $143,000 Total $ 323,000 New Hampshire 360 $ 750 $270,000 Master chet $ 1400 $252000 Total $522000 Total #1,249,000 Production budget for ruly Backyard chet | Master chef Maine 150 Vermont 110 New Hampshire Desire inventory July 31 Total 462 estimated beginning inventory July (30) (32) Total unils to be produced 430 Backyard chet 180 revenue 310 240 360 180 40 950 920

Page No ③ @) * direct materials purchases budget for July Grates Stainless Burner shelves Total steel subasseng -blies 24x920 2X920 4X920 = 22080 Backyard chef 3x920 = 2760 1840 = 3680 30360 6X430 Master chet 42 x 430 UX430 51430 = 18060 =1720 - 2150 24510 2580 desired inventory a 340 1800 315 Total 5680 41940 155 2610 3715 6145 59480] estimated beginning (290) (1500) (140)(340)(2300) inventory, July Total purchases to 5390 40440 3545 5805 55180 be made unit price $157 #6 $110 $10 Total direct materials to be purchased *80850 $ 249,640 $389950 $ 58,050$ 74/490 @direct labor cond budget for July Stamping Forming Ansemblay department department department Potal hours required for po -duction Back yourd chet 0.5x920 - 460 0.6X920 =5521x920 = 920 1932 Master chef 6.6x430 = 258 0.8 x 430 = 344 1.5x430=645 1947 718 896 1565 3179 $14 Total direct labor cost $12,206 $ 13,440 $21,910 $47556 Total labor cost per hour $17 $15