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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 March is summarized as follows: a. Estimated sales for March by sales territory: Maine: Backyard Chef 350 units at $800 per unit Master Chef 200 units at $1,400 per unit Vermont: Backyard Chef 400 units at $825 per unit Master Chef 240 units at $1,500 per unit New Hampshire: Backyard Chef 320 units at $850 per unit Master Chef 200 units at $1,600 per unit b. Estimated inventories at March 1: Direct materials: Finished products: Grates 320 units Backyard Chef 30 units Stainless steel 1.700 lb. Master Chef 36 units Burner subassemblies 190 units Shelves 350 units c. Desired inventories at March 31: Direct materials: Finished products: Grates 300 units Backyard Chef 40 units Stainless steel 1,500 lb. Master Chef 26 units Burner subassemblies 210 units Shelves 400 units d. Direct materials used in production: In manufacture of Backyard Chef: Grates 3 units per unit of product Stainless steel 24 lb. 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 lb. per unit of product Burner subassemblies 4 units per unit of product Shelves S units per unit of product e. Anticipated purchase price for direct materials: Grates $16 per unit Burner subassemblies $120 per unit Stainless steel $8 per lb. Shelves $12 per unit f. Direct labor requirements: Backyard Chef: Stamping Department 0.50 hr. at $18 per hr. Forming Department 0.60 hr. at $16 per hr. Assembly Department 1.00 hr. at $15 per hr. Master Chef: Stamping Department 0.60 hr. at $18 per hr. Forming Department 0.80 hr. at $16 per hr. Assembly Department 1.50 hrs. at $15 per hr. Instructions 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March. 4. Prepare a direct labor cost budget for March.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

Solutions

Chapter
Section
Chapter 22, Problem 22.2APR
Textbook Problem

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 March is summarized as follows:

  1. a. Estimated sales for March by sales territory:
Maine:  
Backyard Chef  350 units at $800 per unit
Master Chef  200 units at $1,400 per unit
Vermont:  
Backyard Chef  400 units at $825 per unit
Master Chef  240 units at $1,500 per unit
New Hampshire:  
Backyard Chef  320 units at $850 per unit
Master Chef  200 units at $1,600 per unit
  1. b. Estimated inventories at March 1:
Direct materials: Finished products:
Grates  320 units Backyard Chef  30 units
Stainless steel  1.700 lb. Master Chef  36 units
Burner subassemblies 190 units    
Shelves 350 units    
  1. c. Desired inventories at March 31:
Direct materials:   Finished products:  
Grates  300 units Backyard Chef  40 units
Stainless steel 1,500 lb. Master Chef  26 units
Burner subassemblies  210 units    
Shelves  400 units    
  1. d. Direct materials used in production:
In manufacture of Backyard Chef:  
Grates  3 units per unit of product
Stainless steel  24 lb. 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 lb. per unit of product
Burner subassemblies  4 units per unit of product
Shelves  S units per unit of product
  1. e. Anticipated purchase price for direct materials:
Grates $16 per unit Burner subassemblies $120 per unit
Stainless steel $8 per lb. Shelves $12 per unit
  1. f. Direct labor requirements:
Backyard Chef:  
Stamping Department  0.50 hr. at $18 per hr.
Forming Department  0.60 hr. at $16 per hr.
Assembly Department  1.00 hr. at $15 per hr.
Master Chef:  
Stamping Department  0.60 hr. at $18 per hr.
Forming Department  0.80 hr. at $16 per hr.
Assembly Department  1.50 hrs. at $15 per hr.

 Instructions

  1. 1. Prepare a sales budget for March.
  2. 2. Prepare a production budget for March.
  3. 3. Prepare a direct materials purchases budget for March.
  4. 4. Prepare a direct labor cost budget for March.

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Chapter 22 Solutions

Accounting
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