Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The

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 2014 is summarized as follows:

Required:

1.  Prepare a sales budget for July.

2.  Prepare a production budget for July.

3.  Prepare a direct materials purchases budget for July.

4.  Prepare a direct labor cost budget for July.

Gourmet Grill Company
Sales Budget
For the Month Ending July 31, 2014 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 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 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 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 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 Grates.... $15 per unit Burner subassemblies.... 110 per unit Stainless steel.... $6 per lb. Shelves.... $10 per unit 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 hr. at $14 per hr.

Explanation / Answer

. Gourmet Grill Company Direct Materials Purchases Budget For the Month Ending July 31, 2014 Grates Stainless Steel Burner Sub- Shelves Total (units) (lbs.) assemblies (units) (units) Required units for production: Backyard Chef 2760 22080 1840 3680 30360 Master Chef 2580 18060 1720 2150 24510 Plus desired inventory, July 31, 2014 340 1800 155 315 2610 Total 5680 41940 3715 6145 57480 Less estimated inventory, July 1, 2014 290 1500 170 340 2300 Total units to be purchased 5390 40440 3545 5805 55180 Unit price 15 6 110 10 Total direct materials to be purchased 80850 242640 389950 58050 771490 4. Prepare a direct labor cost budget for July. Gourmet Grill Company Direct Labor Cost Budget For the Month Ending July 31, 2014 Stamping Forming Department Assembly Department Total Department Hours required for production: Backyard Chef 460 552 920 1932 Master Chef 258 344 645 1247 Total 718 896 1565 3179 Hourly rate 17 15 14 Total direct labor cost 12206 13440 21910 47556

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