Caprie Pets Food Company manufactures and sells dog food called Caprie Supreme. The following data are available for preparing budgets for Caprie Supreme for the first 2 quarters of 2019.

1. Sales: quarter 1 40,000 bags; quarter 2 50,000 bags. Selling price is $63 per bag.
2. Direct materials: each bag of Caprie Supreme requires 5 pounds of protein at a cost of $3.80 per pound and 10 pounds of carbohydrates at $1.50 per pound.
3. Desired inventory levels:

Type of Inventory	January 1	April 1	July 1
Bags	10,000	15,000	20,000
Protein (pounds)	9,000	12,000	15,000
Carbohydrates (pounds)	15,000	20,000	25,000

4. Direct labour: direct labour time is 15 minutes per bag at an hourly rate of $12 per hour.
5. Interest expense is $70,000.
6. Income taxes are expected to be 30% of income before income taxes.

The direct labour budget shows expected costs to be $135,000 in quarter 1 and 165,000 in quarter 2. The selling and administrative expenses budget shows expected costs to be $402,000 in quarter 1 and $465,000 in quarter 2. The manufacturing overhead budget shows expected costs to be 100% of direct labour cost. The direct materials budget for carbohydrates shows the cost of carbohydrates to be $682,500 in quarter 1 and $832,500 in quarter 2.

1. Prepare the sales budget for the first 6 months of 2019 by quarters.
2. Prepare the production budget for the first 6 months of 2019 by quarters.
3. Prepare the direct materials budget for the first 6 months of 2019 by quarters.
4. Prepare the budgeted income statement for the first 6 months of 2019.