Answer:
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
