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, 29,400 bags; quarter 2, 42,400 bags. Selling price is $63 per bag.
2.		Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarr at $1.50 per pound.
3.		Desired inventory levels:

Type of Inventory		January 1		April 1		July 1
Snare (bags)		8,500		12,200		18,500
Gumm (pounds)		9,300		10,400		13,100
Tarr (pounds)		14,400		20,500		25,300

4.		Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour.
5.		Selling and administrative expenses are expected to be 15% of sales plus $176,000 per 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 $298,000 in quarter 1 and $423,500 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 Expected Unit Sales 9,400 42,40 71800 Unit Selling Price Total Sales $1852200 $12671200 $4523400 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Six Months Expected Unit Sales Desired Ending Finished Goods Units 12200 Total Required Units 42,400 18500 60900 12200 48700 | 81800 41600 8500 33100 Beginning Finished Goods Units Required Production Units (b) Your answer is partially correct. Try again. Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2020 Quarter Six Months 2 2 Units to be Produced Direct Materials per Unit Total Pounds Needed for Production Desired Ending Direct Materials (Pounds) 4 Total Materials Required Less Beginning Direct Materials (Pounds) Direct Materials Purchases 2000 Cost per Pound Total Cost of Direct Materials Purchases A PA $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget For the Six Months Ending June 30, 2020 Quarter Six Months Units to be produced Direct Labor Time (Hours) per Unit Total Required Direct Labor Hours Direct Labor Cost per Hour Total Direct Labor Cost Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020 A Quarter Six Months Sales Variable Expenses $ Fixed Expenses Total Selling and Administrative Expenses