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, 28,000 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. 2. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 8,100 12,400 18,400 Snare (bags) Gumm (pounds) Tarr (pounds) 9,200 10,400 13.500 14,400 20,300 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.) (b) 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 2