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. 2. Sales: quarter 1, 28,000 bags; quarter 2,43,000 bags. Selling price is $61 per bag. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.75 per pound. Desired inventory levels: 3. April 1 12,400 July 1 18,400 Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8,100 9,200 14,400 10,400 20,300 13,500 25,300 4. 5. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $177,000 per quarter. Interest expense is $100,000. Income taxes are expected to be 30% of income before income taxes. 6. 7. 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 $302,000 in quarter 1 and $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) Your answer is correct. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter Six Months 1 2 ited Unit Sales 28000 43000 71000 ielling Price $ 61 $ 61 $ 61 Sales $ 1708000 $ 2623000 $ 4331000 Prepare the production budget. COOK FARI SUPPLY COMP NY Production Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Expected Unit Sales 28000 Add Desired Ending Finished Goods Units 12400 Total Required Units 40400 Less Beginning Finished Goods Units -8100 i 124 Required Production Units 32300 e Textbook and Media Attempts: 4 of 7 used Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, eg, 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter V $ $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, eg.for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter 2 $ Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter $ $ $ $ Save for Later Attempts: 0 of 7 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above. Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, eg. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter SIX Months 2 $ $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, eg for 45 minutes the proportion will be 0.75) COOK FARM SUPPLY COMPANY Direct Labor Budget V Quarter Six Months $ $ $ $ Prepare the selling and administrative expense budget COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter SIX Months $ $ $ $ Save for Later Attempts: 0 of 7 used Submit Answer (c) The parts of this question must be completed in order. This part will be available when you complete the part above. Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Sales 1,708,000.00 2,623,000.0 Variable Expenses $ 256,200.00 $ 393,450.00 Fixed Expenses 177,000.00 177,000.00 Total Selling and Administrative Expenses $ 433,200.00 $ 570,450.00 e Textbook and Media Attempts: 4 of 7 used Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to O decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement $ Save for Later Attempts: 0 of 7 used Submit