Question

1. Sales, Production, Direct Materials Purchases, and Budget that estimates direct labor hours and related costs needed to support budgeted production.Direct Labor Cost Budgets

   The An accounting device used to plan and control resources of operational departments and divisions.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 One of the major elements of the income statement budget that indicates the quantity of estimated sales and the expected unit selling price.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 A budget of estimated unit production.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 A budget that uses the production budget as a starting point to budget materials purchases.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 Budget that estimates direct labor hours and related costs needed to support budgeted production.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			$		$		$	$

• Expected units to be sold

• Desired inventory, July 31

• Total units available

• Estimated inventory, July 1

• Total units to be produced

• Expected units to be sold

• Desired inventory, July 31

• Total units available

• Estimated inventory, July 1

• Total units to be produced

• Expected units to be sold

• Desired inventory, July 31

• Total units available

• Estimated inventory, July 1

• Total units to be produced

• Expected units to be sold

• Desired inventory, July 31

• Total units available

• Estimated inventory, July 1

• Total units to be produced

• Expected units to be sold

• Desired inventory, July 31

• Total units available

• Estimated inventory, July 1

• Total units to be produced

Answer 1

Part 1
Gourmet Grill Company
Sales Budget
For the Month Ending July 31
Product and Area		Unit Sales	Unit Selling	Total Sales
		Volume	Price
Backyard Chef:
Maine		310.00	$              700.00	$          217,000
Vermont		240.00	$              750.00	$          180,000
New Hampshire		360.00	$              750.00	$          270,000
				$          667,000
Master Chef:
Maine		150.00	$          1,200.00	$          180,000
Vermont		110.00	$          1,300.00	$          143,000
New Hampshire		180.00	$          1,400.00	$          252,000
				$          575,000
Total revenue from sales		-	-	1,242,000.00
Part 2
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		-30	-32
Total units to be produced		920	430
Part 3
Gourmet Grill Company
Direct Materials Purchases Budget
For the Month Ending July 31
	Grates	Stainless Steel	Burner Sub-	Shelves	Total
	(units)	(lbs.)	assemblies	(units)
			(units)
Required units for production:
Backyard Chef	2,760	22,080	1,840	3,680
Master Chef	2,580	18,060	1,720	2,150
Desired inventory, July 31	340	1,800	155	315
Total	5,680	41,940	3,715	6,145
Estimated inventory, July 1	-290	-1,500	-170	-340
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	$   771,490
Part 4
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
		Stamping	Forming	Assembly	Total
		Department	Department	Department
Hours required for production:
Backyard Chef		460	552	920
Master Chef		258	344	645
Total		718	896	1,565
Hourly rate		$                             17	$                      15	$                    14
Total direct labor cost		$                     12,206	$              13,440	$            21,910	$     47,556