1. Sales: quarter 1, 29,800 bags; quarter 2,42,400 bags. Selling price is $62 per bag. 2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,300 12,400 18,100 Gumm (pounds) 9,300 10,500 13,300 Tarr (pounds) 14,300 20,400 25,400 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. 5. Selling and administrative expenses are expected to be 15% of sales plus $178,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes. Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $300,000 in quarter 1 and $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) CULLUMBER FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2020 V Quarter 1 2 Total Materials Required Expected Unit Sales Total Pounds Needed for Production Add : Desired Ending Finished Goods Units Total Materials Required Less : Beginning Finished Goods Units Direct Materials Purchases Cost per Pound $ $ Total Cost of Direct Materials Purchases $ $ CULLUMBER FARM SUPPLY COMPANY Direct Labor Budget Quarter 1 2 Mc $ ta $