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 CompanySales BudgetFor the Month Ending July 31 Product and Area Unit SalesVolume Unit SellingPrice Total Sales Backyard Chef: Maine 310 $700 $217000 Vermont 240 750 18000 New Hampshire 360 750 270000 Total 910 $667000 Master Chef: Maine 150 $1200 $180000 Vermont 110 1300 143000 New Hampshire 180 1400 252000 Total 440 $575000 Total revenue from sales $1242000 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 CompanyProduction BudgetFor the Month Ending July 31 Units Backyard Chef Master Chef Expected units to be sold 910 440 Desired inventory, July 31 40 22 Total units available 950 462 Estimated inventory, July 1 X incorrect 30 X incorrect 32 Total units to be produced 920 430 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 CompanyDirect Materials Purchases BudgetFor the Month Ending July 31 Grates(units) Stainless Steel(lbs.) Burner Sub-assemblies(units) Shelves(units) Total Required units for production: Backyard Chef 2760 22080 1840 3680 - Master Chef 2580 18060 1720 2150 - Desired inventory, July 31 340 1800 155 315 - Total 5680 41940 3715 6145 - Estimated inventory, July 1 X Incorrect 290 X Incorrect 1500 X Incorrect 170 X Incorrect 340 - Total units to be purchased 5390 40440 3545 5805 - Unit price $15 $6 $110 $10 - Total direct materials to be purchased $80850 $242640 $389950 $58050 $771490

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 CompanySales BudgetFor the Month Ending July 31 Product and Area Unit SalesVolume Unit SellingPrice Total Sales Backyard Chef: Maine 310 $700 $217000 Vermont 240 750 18000 New Hampshire 360 750 270000 Total 910 $667000 Master Chef: Maine 150 $1200 $180000 Vermont 110 1300 143000 New Hampshire 180 1400 252000 Total 440 $575000 Total revenue from sales $1242000 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 CompanyProduction BudgetFor the Month Ending July 31 Units Backyard Chef Master Chef Expected units to be sold 910 440 Desired inventory, July 31 40 22 Total units available 950 462 Estimated inventory, July 1 X incorrect 30 X incorrect 32 Total units to be produced 920 430 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 CompanyDirect Materials Purchases BudgetFor the Month Ending July 31 Grates(units) Stainless Steel(lbs.) Burner Sub-assemblies(units) Shelves(units) Total Required units for production: Backyard Chef 2760 22080 1840 3680 - Master Chef 2580 18060 1720 2150 - Desired inventory, July 31 340 1800 155 315 - Total 5680 41940 3715 6145 - Estimated inventory, July 1 X Incorrect 290 X Incorrect 1500 X Incorrect 170 X Incorrect 340 - Total units to be purchased 5390 40440 3545 5805 - Unit price $15 $6 $110 $10 - Total direct materials to be purchased $80850 $242640 $389950 $58050 $771490

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
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
Backyard Chef:
	Maine	310	$700	$217000
	Vermont	240	750	18000
	New Hampshire	360	750	270000
	Total	910		$667000

Master Chef:
	Maine	150	$1200	$180000
	Vermont	110	1300	143000
	New Hampshire	180	1400	252000
	Total	440		$575000
Total revenue from sales			$1242000

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
Expected units to be sold	910	440
Desired inventory, July 31	40	22
Total units available	950	462
Estimated inventory, July 1	X incorrect 30	X incorrect 32
Total units to be produced	920	430

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	2760	22080	1840	3680	-
Master Chef	2580	18060	1720	2150	-
Desired inventory, July 31	340	1800	155	315	-
Total	5680	41940	3715	6145	-
Estimated inventory, July 1	X Incorrect 290	X Incorrect 1500	X Incorrect 170	X Incorrect 340	-
Total units to be purchased	5390	40440	3545	5805	-
Unit price	$15	$6	$110	$10	-
Total direct materials to be purchased	$80850	$242640	$389950	$58050	$771490

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