Sales, Production, Direct Materials Purchases, and Direct Labor Cost Budgets The budget director of Gourmet Grill... 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 subassemblies155 units
Shelves 315 units
Finished products:
Backyard Chef 40 units
Master Chef 22 units
d. Direct materials used in production:
In the 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 the 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. The 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 $ $
Vermont
New Hampshire
Total $
Master Chef:
Maine $ $
Vermont
New Hampshire
Total $
Total revenue from sales $
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
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
Master Chef
Desired inventory, July 31
Total
Estimated inventory, July 1
Total units to be purchased
Unit price $ $ $ $
Total direct materials to be purchased $ $ $ $ $
4. Prepare a direct labor cost budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping
Department Forming Department Assembly Department Total
Hours required for production:
Backyard Chef
Master Chef
Total
Hourly rate $ $ $
Total direct labor cost $ $

Gourmet Grill Company

1. 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                     $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

2. Production Budget for July:

Gourmet Grill Company

Production Budget  for the Month Ending July 31

Units

                                          Backyard Chef    Master Chef

Units sold                                   910                     440

Ending inventory                        40                        22

less beginning inventory          -30                       -32

Units to be produced              920                      430

3. Direct Materials Purchase Budget for July:

Gourmet Grill Company

Direct Materials Purchases Budget

For the Month Ending July 31

Grates  (units)                                      5,390 units

Stainless Steel (lbs.)                            40,440 lbs

Burner Sub- assemblies (units)           3,545 units

Shelves  (units)                                    5,805 units

Total  Required units for production:

                                  Backyard Chef    Master Chef     Total for prodn.

Grates                             2,760 units     2,580 units      5,340 units

Stainless steel             22,080 lbs       18,060 lbs        40,140 units

Burner subassemblies   1,840 units      1,720 units      3,560 units

Shelves                          3,680 units      2,150 units      5,890 units  

                                   Total used       July 31    Total   July 1     Purchases

                                  for prodn.       Desired                Estimated

Grates                            5,340             340      5,680     290         5,390

Stainless steel             40,140           1,800     41,940    1,500       40,440

Burner subassemblies 3,560             155       3,7`15       170          3,545

Shelves                         5,830             315        6,145      340          5,805

                                                Grates    Stainless    Burner          Shelves

                                                                 Steel        sub-assembly

Total units to be purchased   5,390       40,440        3,545            5,805

Unit price                                    $15              $6           $110               $ 10

Total direct materials

  to be purchased             $80,850  $242,640  $389,950      $58,050

Total cost of direct materials to be purchased = $771,490

4. Direct labor cost budget:

                              Stamping        Forming        Assembly        Total

Hours used:

Backyard Chef        460                 552             920                1,932

Master Chef           258                  344             645                1,247

Total hours used    718                  896           1,565                3,179

Hourly rate             $17                   $15              $14

Total cost            $12,206          $13,440       $21,910        $47,556

Explanation:

1) Data for July:

a) Sales by territory

                                        Maine        Vermont         New Hampshire

Backyard Chef (units)       310                240                    360        910

Master Chef (units)           150                 110                     180        440

Backyard Chef (prices)      $700           $750                   $750

Master Chef (prices)       $1,200         $1,300                $1,400

Sales Value:

Backyard Chef            $217,000     $180,000            $270,000

Master Chef                  180,000       143,000              252,000

Total sales                 $397,000     $323,000           $522,000

b. Estimated Inventories at July 1:

Direct materials:        Beginning    Purchases    Desired Ending     Used

Grates                           290 units       5,390          340 units           5,340

Stainless steel            1,500 lbs.       40,440        1,800 lbs             40,140

Burner subassemblies  170 units       3,545          155 units           3,560

Shelves                         340 units       5,805          315 units           5,830

c. Cost of Materials:        Units      unit costs       Total costs

Grates                             5,390       $15                $80,850  

Stainless steel              40,440       $6               $242,640

Burner subassemblies  3,545       $110             $389,950

Shelves                          5,805       $10                $58,050

Total                                                                     $771,490

d. Labor Cost

                                  Labor cost per hour      Hours Required

                                                                         Backyard    Master

Stamping Department       $17                        0.50 hr        0.60 hr

Forming Department         $15                       0.60 hr        0.80 hr

Assembly Department      $14                        1.00 hr         1.50 hrs

Units produced                                               920             430

Stamping Department total hours                 460 hrs       258 hrs

Forming Department                                      552 hrs       344 hrs

Assembly Department                                   920 hrs       645 hrs

Direct labor Cost :

Stamping department                            $7,820        $4,386     $12,206

Forming department                             $8,280         $5,160       13,440

Assembly department                          $12,880       $9,030        21,910

Total                                                     $28,980       $18,576    $47,556

or

Stamping department cost                          $8.50           $10.20

Forming department cost                              9.00             12.00

Assembly department cost                          14.00             21.00

Direct labor cost per unit                           $31.50          $43.20

Units produced                                              920             430

Total direct labor cost                               $28,980       $18,576   $47,556

e. Materials Usage

                                        Backyard Chef       Master Chef        Total

Units produced                 920                            430                  1,350

Materials used:

Grates                             2,760 units              2,580 units         5,340 units

Stainless steel             22,080 lbs                18,060 lbs           40,140 lbs

Burner subassemblies   1,840 units               1,720 units         3,560 units

Shelves                          3,680 units               2,150 units         5,830 units

f) Finished products:     Beginning Production  Desired Ending   Units Sold

Backyard Chef           30 units      920 units          40 units         910 units

Master Chef               32 units      430 units          22 units        440 units

answer; situational irony;