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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 150 units at $1,200 per unit Master Chef Vermont: Backyard Chef 240 units at $750 per unit 110 units at $1,300 per unit Master Chef New Hampshire: Backyard Chef 350 units at $750 per unit 180 units at $1,400 per unit Master Chef b. Estimated inventories at July 1 Direct materials: Grates Stainless steel 290 units 1,500 lbs. 170 units 340 units Burner subassemblies Shelves Finished products: Backyard Chef Master Chef c. Desired inventories at July 31: 30 units 32 units Direct materials: Grates Stainless steel 340 units 1,800 Ibs. 155 units 315 units Burner subassemblies Shelves Finished products: Backyard Chef Master Chef 40 units 22 units

Answer 1

Answer

• [2]

Production Budget
For the Month Ending July 31
	Units
	Backyard Chef	Master Chef
Budgeted units to be sold	910	440
Desired ending inventory	40	22
Total needs	950	462
Beginning Inventory	(30)	(32)
Budgeted units to be produced	920	430

• [3]

Direct Materials Purchases Budget
For the Month Ending July 31
	Grates	Stainless Steel	Burner Sub-	Shelves
	(units)	(lbs.)	assemblies	(units)
			(units)
Required units for production:
Backyard Chef	2,760	22,080	1,840	3,680	30,360
Master Chef	2,580	18,060	1,720	2,150	24,510
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

• [4]

Direct Labor Cost Budget
For the Month Ending July 31					Forming		Assembly
			Stamping		Department		Department
			Department
Hours required for production:
	Backyard Chef		460		552		920	1932
	Master Chef		258		344		645	1247
			718		896		1565	3179
Hourly rate			$17		$15		$14
Total direct labor cost			$12,206		$13,440		$21,910	$47,556