The budget director of Outdoor Chef Grill Company requests estimates of sales, p

Question

The budget director of Outdoor Chef 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 May 2012 is summarized as follows:

1. Prepare a sales budget for May.

2. Prepare a production budget for May.

3. Prepare a direct materials purchases budget for May.

4. Prepare a direct labor cost budget for May.

OUTDOOR CHEF GRILL COMPANY
Sales Budget
For the Month Ending May 31, 2012 Product and Area Unit Sales
Volume Unit Selling
Price Total Sales Backyard Chef: Maine Vermont New Hampshire Total Master Chef: Maine Vermont New Hampshire Total Total revenue from sales

Explanation / Answer

Accounting 1. Prepare asales budgetfor May. OUTDOOR CHEF GRILL COMPANY Sales Budget For the Month Ending May 31, 2012 Product and Area Unit Sales Unit Selling Total Sales Volume Price Backyard Chef: Maine 280 $ 750.00 $ 210,000.00 Vermont 210 $ 800.00 $ 168,000.00 New Hampshire 305 $ 850.00 $ 259,250.00 Total 795 $ 2,400.00 $ 637,250.00 Master Chef: Maine 250 $ 1,500.00 $ 375,000.00 Vermont 160 $ 1,600.00 $ 256,000.00 New Hampshire 275 $ 1,700.00 $ 467,500.00 Total 685 $ 4,800.00 $ 1,098,500.00 Total revenue from sales 2. Prepareaproduction budgetfor May. OUTDOOR CHEF GRILL COMPANY Production Budget For the Month Ending May 31, 2012 Units Backyard Chef Master Chef Expected units to be sold 795 685 Plus desired inventory, May 31, 2012 31 23 Total 826 708 Less estimated inventory, May 1, 2012 36 18 Total units to be produced 790 690 3. Prepare adirect materials purchases budgetfor May. OUTDOOR CHEF GRILL COMPANY Direct Materials Purchases Budget For the Month Ending May 31, 2012 Grates Stainless Steel Burner Sub- Shelves Total (units) (lbs.) assemblies (units) (units) Required units for production: Backyard Chef 2370 18960 1580 3160 Master Chef 4140 28980 2760 3450 Plus desired inventory May 31, 2012 320 2100 135 285 Total 6830 50040 4475 6895 Less estimated inventory May 1, 2012 300 1800 150 300 Total units to be purchased 6530 48240 4325 6595 Unit price $ 16.00 $ 5.00 $ 125.00 $ 8.00 Total direct materials to be purchased $ 104,480.00 $241,200.00 $540,625.00 $ 52,760.00 $939,065.00 4. Prepare adirect labor cost budgetfor May. OUTDOOR CHEF GRILL COMPANY Direct Labor Cost Budget For the Month Ending May 31, 2012 Stamping Forming Department Assembly Department Total Department Hours required for production: Backyard Chef 474 632 1580 Master Chef 552 1035 1725 Total 1026 1667 3305 Hourly rate $ 17.00 $ 14.00 $ 12.00 Total direct labor cost $ 17,442.00 $ 23,338.00 $ 39,660.00 $80,440.00 Accounting

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