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 2022. 1. Sales: quarter 1,40,000 bags; quarter 2, 56,000 bags. Selling price is $60 per bag. 2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.8 per pound and 6 pounds of Tarr at $1.5 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,000 15,000 18,000 Gumm (pounds) 9,000 10,000 13,000 Tarr (pounds) 14,000 20,000 25,000 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 $175,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $297,000 in quarter 1 and $439,500 in quarter 2. Expected Unit Sales Unit Selling Price Total Sales Expected Unit Sales COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 Quarter 1 2 Add Desired Ending Finished Goods Units Total Required Units 40,000 60 $ 56,000 60 $ Six Months 96,000 60 2,400,000 $ 3,360,000 $ 5,760,000 COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter 1 2 40,000 15000 55000 56,000 18,000 74,000 Less Beginning Finished Goods Units (8000) i (15000) Required Production Units 47,000 59,000