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: a. Estimated sales for March by sales territory: Maine: Backyard Chef 350 units at $800 per unit Master Chef 200 units at $1,400 per unit Vermont: Backyard Chef 400 units at $825 per unit Master Chef 240 units at $1,500 per unit New Hampshire: Backyard Chef 320 units at $850 per unit Master Chef 200 units at $1,600 per unit b. Estimated inventories at March 1: Direct materials: Grates 320 units Stainless steel 1,700 lb. Burner subassemblies 190 units Shelves 350 units Finished products: Backyard Chef 30 units Master Chef 36 units c. Desired inventories at March 31: Direct materials: Grates 300 units Stainless steel 1,500 lb. Burner subassemblies 210 units Shelves 400 units Finished products: Backyard Chef 40 units Master Chef 26 units d. Direct materials used in production: In manufacture of Backyard Chef: Grates 3 units per unit of product Stainless steel 24 lb. 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 lb. 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 $16 per unit Stainless steel $8 per lb. Burner subassemblies $120 per unit Shelves $12 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 $18 per hr. Forming Department 0.80 hr. at $16 per hr. Assembly Department 1.50 hrs. at $15 per hr.

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: a. Estimated sales for March by sales territory: Maine: Backyard Chef 350 units at $800 per unit Master Chef 200 units at $1,400 per unit Vermont: Backyard Chef 400 units at $825 per unit Master Chef 240 units at $1,500 per unit New Hampshire: Backyard Chef 320 units at $850 per unit Master Chef 200 units at $1,600 per unit b. Estimated inventories at March 1: Direct materials: Grates 320 units Stainless steel 1,700 lb. Burner subassemblies 190 units Shelves 350 units Finished products: Backyard Chef 30 units Master Chef 36 units c. Desired inventories at March 31: Direct materials: Grates 300 units Stainless steel 1,500 lb. Burner subassemblies 210 units Shelves 400 units Finished products: Backyard Chef 40 units Master Chef 26 units d. Direct materials used in production: In manufacture of Backyard Chef: Grates 3 units per unit of product Stainless steel 24 lb. 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 lb. 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 $16 per unit Stainless steel $8 per lb. Burner subassemblies $120 per unit Shelves $12 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 $18 per hr. Forming Department 0.80 hr. at $16 per hr. Assembly Department 1.50 hrs. at $15 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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Question

a. Estimated sales for March by sales territory:

Maine:
Backyard Chef	350 units at $800 per unit
Master Chef	200 units at $1,400 per unit
Vermont:
Backyard Chef	400 units at $825 per unit
Master Chef	240 units at $1,500 per unit
New Hampshire:
Backyard Chef	320 units at $850 per unit
Master Chef	200 units at $1,600 per unit

b. Estimated inventories at March 1:

Direct materials:
Grates	320 units
Stainless steel	1,700 lb.
Burner subassemblies	190 units
Shelves	350 units
Finished products:
Backyard Chef	30 units
Master Chef	36 units

c. Desired inventories at March 31:

Direct materials:
Grates	300 units
Stainless steel	1,500 lb.
Burner subassemblies	210 units
Shelves	400 units
Finished products:
Backyard Chef	40 units
Master Chef	26 units

d. Direct materials used in production:

In manufacture of Backyard Chef:
Grates	3 units per unit of product
Stainless steel	24 lb. 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 lb. 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	$16 per unit
Stainless steel	$8 per lb.
Burner subassemblies	$120 per unit
Shelves	$12 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 $18 per hr.
Forming Department	0.80 hr. at $16 per hr.
Assembly Department	1.50 hrs. at $15 per hr.

1. Prepare a sales budget for March.
Gourmet Grill Company
Sales Budget
For the Month Ending March 31
Unit Sales
Unit Selling
Product and Area
Volume
Price
Total Sales
Backyard Chefr:
Maine
Vermont
New Hampshire
Total
Master Chef:
Maine
Vermont
New Hampshire
Total
Total revenue from sales
2. Prepare a production budget for March.
Gourmet Grill Company
Production Budget
For the Month Ending March 31
Units
Backyard Chef
Master Chef
Expected units to be sold
Plus desired Inventory, March 31
Total units required
Less estimated inventory, March 1
Total units to be produced
3. Prepare a direct materials purchases budget for March.
Gourmet Grill Company
Direct Materials Purchases Budget
For the Month Ending March 31
Burner Sub-
Grates
Stainless Steel
Shelves
assemblies
(units)
(Ib.)
(units)
Total
(units)
Required units for production:
Backyard Chef
Master Chef
Plus desired inventory, March 31
Total units required
Less estimated Inventory, March 1
Total units to be purchased
Unit price
Total direct materials to be purchased
4. Prepare a direct labor cost budget for March.
Gourmet Grill Company
Direct Labor Cost Budget
For the Month Ending March 31
Stamping
Forming
Assembly
Total
Department
Department
Department
Hours required for production:
Backyard Chef
Master Chef
Total hours required
Hourly rate
Total direct labor cost

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