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 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.

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 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 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.

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
Burner Sub-
Grates
Stainless Steel
Shelves
assemblies
Total
(units)
(Ibs.)
(units)
(units)
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
%24
%24
%24
%24

4. Prepare a direct labor cost budget for July.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending July 31
Stamping
Forming Department
Assembly Department
Total
Department
Hours required for production:
Backyard Chef
Master Chef
Total
Hourly rate
Total direct labor cost
%24
%24

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