Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020. 1. Sales: quarter 1, 28,600 bags: quarter 2, 42,800 bags. Selling price is $63 per bag. 2. Direct materials: each bag of Snare requires 5 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 Snare (bag) Gumm (pounds) Tarr (pounds) January 1 April 1 July 1 8,100 12,100 18,200 9,300 10,300 13.400 14,300 20,400 25,200 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 $177,000 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.) Your answer is partially correct. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter Six Months Production Units Units 242800 371400 128600 63 Unit Selling Price Price $ $ 63 Total Sales 8101800 15296400 23398200 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Quarter Ending June 30, 2020 Quarter Six Months 128600 242300 Expected Unit Sales Add : Desired Ending Finished Goods Units 12100 18200 Total Required Units 140700 261000 Less : Beginning Finished Goods Units 8100 i 12100 i Total Direct Labor Cost 132600 248900 381500