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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 2016 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	1.0 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.

1. Prepare a sales budget for July. Gourmet Grill Company Sales Budget For the Month Ending July 31, 2016 Unit Sales Product and Area Unit Selling Price Total Sales Volume 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. Gourmet Grill Company Production Budget For the Month Ending July 31, 2016 Units Backyard Chef Master Chef Expected units to be sold Plus desired inventory, July 31, 2016 Total Less estimated inventory, July 1, 2016 Total units to be produced 3. Prepare a direct materials purchases budget for July. Gourmet Grill Company Direct Materials Purchases Budget For the Month Ending July 31, 2016 Burner Sub- Grates Stainless Steel Shelves assemblies Total (units) (lbs.) (units) (units) Required units for production: Backyard Chef Master Chef Plus desired inventory, July 31, 2016 Total Less estimated inventory, July 1, 2016 Total units to be purchased Unit price $ $ $ Total direct materials to be purchased $ S 4. Prepare a direct labor cost budget for July. Gourmet Grill Company Direct Labor Cost Budget For the Month Ending July 31, 2016 Stamping Department Forming Department Assembly Department Total Hours required for production: Backyard Chef Master Chef Total Hourly rate $ Total direct labor cost $ $ $

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