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 1,28,600bags; quarter 2,43,400bags. Selling price is $62per 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 12,300 18,300

Gumm (pounds) 9,400 10,500 13,500

Tarr (pounds) 14,300 20,400 25,100

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 $178,000per 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 $299,000in quarter 1 and $426,500in quarter 2.

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

Please Prepare the Multistep Income Statement Please also include calculations on how you got the numbers for each line on the multistep income statement