Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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, 29,400 bags; quarter 2, 42,600 bags. Selling price is $63 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 $1.75 per pound.
3. Desired inventory levels:

Type of Inventory

January 1

April 1

July 1

Snare (bags) 8,100 12,200 18,100
Gumm (pounds) 9,500 10,100 13,200
Tarr (pounds) 14,200 20,500 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 $179,000 per quarter.
6. Interest expense is $100,000.
7. Income taxes are expected to be 30% of income before income taxes.

(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

Prepare the production budget.

COOK FARM SUPPLY COMPANY Production Budget choose the accounting period For the Six Months Ending June 30, 2020For the Quarter Ending June 30, 2020June 30, 2020

Quarter

Six Months

1

2

enter a number of units

enter a number of units

enter a number of units enter a number of units

enter a total number of units for the first part

enter a total number of units for the first part

enter a number of units enter a number of units
enter a total number of units enter a total number of units enter a total number of units

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting Special Edition For California State University Los Angeles

Authors: Garrison

14th Edition

0077519973, 978-0077519971

More Books

Students also viewed these Accounting questions

Question

Define the Candidate Fitness Standards and the always bar list.

Answered: 1 week ago