Sales, Production, Direct Materials Purchases, and Budget that estimates direct labor hours and related costs needed to support budgeted production.Direct Labor Cost Budgets
The An accounting device used to plan and control resources of operational departments and divisions.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 One of the major elements of the income statement budget that indicates the quantity of estimated sales and the expected unit selling price.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 A budget of estimated unit production.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
- Desired inventory, July 31
- Total units available
- Estimated inventory, July 1
- Total units to be produced
| | |
- Expected units to be sold
- Desired inventory, July 31
- Total units available
- Estimated inventory, July 1
- Total units to be produced
| | |
- Expected units to be sold
- Desired inventory, July 31
- Total units available
- Estimated inventory, July 1
- Total units to be produced
| | |
- Expected units to be sold
- Desired inventory, July 31
- Total units available
- Estimated inventory, July 1
- Total units to be produced
| | |
- Expected units to be sold
- Desired inventory, July 31
- Total units available
- Estimated inventory, July 1
- Total units to be produced
| | |
3. Prepare a A budget that uses the production budget as a starting point to budget materials purchases.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 Budget that estimates direct labor hours and related costs needed to support budgeted production.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 | | $ | | $ | | $ | $ |
