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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
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.
Question
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. |
Transcribed Image Text: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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