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 1,29,200bags; quarter 2,43,200bags. Selling price is $61per bag.2.Direct materials: each bag of Snare requires5pounds of Gumm at a cost of $3.80per pound and6pounds of Tarr at $1.50per pound.3.Desired inventory levels:

Type of Inventory

January 1 April 1 July 1

Snare (bags)8,400 12,200 18,200

Gumm (pounds)9,200 10,200 13,500

Tarr (pounds)14,300 20,400 25,400

4.Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16per hour.

5.Selling and administrative expenses are expected to be 15% of sales plus $180,000per 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 $301,000in quarter 1 and $425,500in quarter 2.

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

Prepare the sales budget.

Prepare the production budget.

Direct Materials Budget

Direct Labor Budget