Cook Farm Su pply Company manufactures and sells a pesticide called Snare. The fol lowing data are available for preparing budgets for Snare for the fl rst 2 quarters of 2020. 1. Sales: quarter 1, 23,400 bags; quarter 2, 42,200 bags. Selling price is $62 per bag. Direct materials: each bagof Snare requires 5 pounds of Gumm at a cost of $3.80 per pound and 6 pounds ofTarr at $1.50 per pound. 3. Desired inventory levels: Type-of Inventory January 1 April 1 July 1 Snare {bags} 8,500 12,300 18,100 Gumm {pounds} 9,300 10,300 13,100 Tarr {pounds} 14,300 20,500 25,100 4. Direct labor: direct labortime is 15 minutes per bagat an hourly rate of $16 per hour. 5. Selling and administrative expenses are expected to be 15% of sales plus $126,000 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 $299,000 in quarter 1 and $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)