The budget director of Gourmet Grill Company requests estimates of sales, produc

Question

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 31 units at $7 per unit Master Chef 15 units at $1,2 per unit Vermont: Backyard Chef 24 units at $75 per unit Master Chef New Hampshire: 11 units at $1,3 per unit Backyard Chef . 36 units at $75 per unit Master Chef 18 units at $1,4 per unit Direct materials: Grates 29 units Stainless steel 1,5 lbs. Burner subassemblies 17 units Shelves 34 units Finished products: Backyard Chef 3 units Master Chef 32 units Direct materials: Finished products: Grates 34 units Stainless steel 1,8 lbs. Burner subassemblies 155 units Shelves 315 units Finished products: Backyard Chef 4 units Master Chef 22units In manufacture of Backyard In manufacture of Master Chef: Backyard Chef: Master Chef:

Explanation / Answer

1. Prepare a sales budget for July. Gourmet Grill Company Sales Budget For the Month Ending July 31, 2014 Product and Area Unit Sales Unit Selling Total Sales Volume Price Backyard Chef: Maine 310 $               700 $      217,000 Vermont 240 $               750 $      180,000 New Hampshire 360 $               750 $      270,000 Total 910 $      667,000 Master Chef: Maine 150 $           1,200 $      180,000 Vermont 110 $           1,300 $      143,000 New Hampshire 180 $           1,400 $      252,000 Total 440 $      575,000 Total revenue from sales $   1,242,000 2. Prepare a production budget for July. Gourmet Grill Company Production Budget For the Month Ending July 31, 2014 Units Backyard Chef Master Chef Expected units to be sold 910 440 Plus desired inventory, July 31, 2014 40 22 Total 950 462 Less estimated inventory, July 1, 2014 30 32 Total units to be produced 920 430 3. Prepare a direct materials purchases budget for July. 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 Master Chef 2580 18060 1720 2150 Plus desired inventory, July 31, 2014 340 1800 155 315 Total 5680 41940 3715 6145 Less estimated inventory, July 1, 2014 290 1500 170 340 Total units to be purchased 5390 40440 3545 5805 Unit price $                                  15 $             6 $               110 $                 10 Total direct materials to be purchased $                          80,850 $242,640 $       389,950 $         58,050 $      771,490 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 Master Chef 258 344 645 Total 718 896 1565 Hourly rate $                 17 $                15 $                14 Total direct labor cost $         12,206 $        13,440 $        21,910 $ 47,556

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