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, 29,200 bags; quarter 2,43,200 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 $1.50 per pound. Desired inventory levels: 3. Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8,400 9,200 14,300 April 1 12,200 10,200 20,400 July 1 18,200 13,500 25,400 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 $180,000 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 $301,000 in quarter 1 and $425,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget Quarter Six Months 2 $ $ $ $ $ $ Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget Quarter Six Months 1 2