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 1,29,400bags; quarter 2,42,600bags. Selling price is $63per bag.
2.		Direct materials: each bag of Snare requires4pounds of Gumm at a cost of $3.80per pound and6pounds of Tarr at $1.75per 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 $16per hour.
5.		Selling and administrative expenses are expected to be 15% of sales plus $179,000per 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 $426,500in quarter 2.