You are the budgeting manager for Summertime Grills Limited. The company makes two types of gas grills
Question:
You are the budgeting manager for Summertime Grills Limited. The company makes two types of gas grills - the Tailgater and the Master Chef. For each of the two models, three raw materials are required and it must go through two production processes. All of the pertinent details for the month of May, 2010 are detailed below:
Projected sales:
Tailgater 5,000 units at $600
Master Chef 2,000 units at $1,300.
Direct materials:
Tailgater:
Grates 2 grates @ $15 each
Stainless steel 10 kg, @ $10 per kg.
Burners 1 burner @ $75 each.
Master Chef:
Grates 4 grates @ $15 each
Stainless steel 15 kg, @ $10 per kg.
Burners 2 burners @ $75 each.
Direct labour:
Tailgater:
Stamping department hour @ $12 per hour
Assembly department 1 hour @ $12 per hour.
Master Chef:
Stamping department hour @ $12 per hour
Assembly department 2 hours @ $12 per hour.
Inventories:
May 1:
Grates 1,000 units
Stainless steel 2,000 kg.
Burners 600 units
Tailgaters (FG) 1,500 units
Master Chefs (FG) 400 units.
May 31:
Grates 800 units
Stainless steel 1,800 kg.
Burners 600 units
Tailgaters (FG) 1,400 units
Master Chefs (FG) 450 units.
Make a sales budget, production budget, direct materials purchases budget and a direct labour budget for the month of May, 2010.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura