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 March is summarized as follows: Instructions 1. Prepare a sales budget for March. 2. Prepare a production budget for March. 3. Prepare a direct materials purchases budget for March.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
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 March is
summarized as follows:
Instructions
1. Prepare a sales budget for March.
2. Prepare a production budget for March.
3. Prepare a direct materials purchases budget for March.
4. Prepare a direct labor cost budget for March.
![a. Estimated sales for March by sales territory:
Maine:
Backyard Chef
850 units at 8800 per unit
Master Chef
200 units at 81,400 per unit
Vermont:
Backyard Chef
400 units at 2825 per unit
Master Chef
240 units at 81,500 per unit
New Hampshire:
Backyard Chef
820 units at 2850 per unit
Master Chef
200 units at 81,600 per unit
b. Estimated inventories at March 1:
Direct materiale:
Finished products:
s20 units Backyard Chef 80 units
Grates
stainless steel
1.700 Ib. Master Chef
36 units
Burner subassemblies 190 units
850 units
shelves
c. Desired inventories at March 81:
Direct materialo:
Finished producte:
Grates
800 units Backyard Chef
40 units
stainless steel
1,500 lb. Master Chef
26 units
Burner subassemblies 210 units
shelves
400 units](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90ca5e3f-35a0-404b-9063-b2aaed153907%2F6e7dde39-711d-46f0-9bd5-d47cd1ed3fb2%2F1b9ul67_processed.png&w=3840&q=75)
![d. Direct materials used in production:
In manufacture of Backyard Chef:
S units per unit of product
Grates
Stainless steel
24 Ib. per unit of product
Burner subassemblies
2 units per unit of product
shelves
4 units per unit of product
In manufacture of Master Chef:
6 units per unit of product
Grates
stainless steel
42 lb. per unit of product
Burner subassemblies
4 units per unit of product
shelves
S units per unit of product
e. Anticipated purchase price for direct materials:
816 per unit Burner subassemblies 8120 per unit
Grates
Stainless oteel 88 per Ib.
shelves
812 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Department 0.50 hr. at $18 per hr.
Forming Department 0.60 hr. at $16 per hr.
Assembly Department 1.00 hr. at $15 per hr.
Master Chef:
stamping Department 0.60 hr. at 818 per hr.
Forming Department 0.80 hr. at 216 per hr.
Assembly Department 1.50 hrs. at 815 per hr.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F90ca5e3f-35a0-404b-9063-b2aaed153907%2F6e7dde39-711d-46f0-9bd5-d47cd1ed3fb2%2Fhd4akns_processed.png&w=3840&q=75)
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