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 2017.

1.

Sales: quarter 1, 28,600 bags; quarter 2, 43,400 bags. Selling price is $62 per bag.

2.

Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.8 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)

8,400

12,300

18,300

Gumm (pounds)

9,400

10,500

13,500

Tarr (pounds)

14,300

20,400

25,100

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 $178,000 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 $299,000 in quarter 1 and $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

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(a)

Your answer is correct.

Prepare the sales budget.

COOK FARM SUPPLY COMPANY Sales Budget

[Entry field with correct answer] June 30, 2017 For the Six Months Ending June 30, 2017 For the Quarter Ending June 30, 2017

Quarter

Six Months

1

2

Expected unit sales

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Unit selling price

$

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$

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$

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Total sales

$

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$

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$

[Entry field with correct answer]

Prepare the production budget.

COOK FARM SUPPLY COMPANY Production Budget

[Entry field with correct answer] For the Quarter Ending June 30, 2017 For the Six Months Ending June 30, 2017 June 30, 2017

Quarter

Six Months

1

2

[Entry field with correct answer] Cost per Pound Total Direct Labor Cost Total Materials Required Direct Labor Time per Unit Direct Materials Purchases Total Cost of Direct Materials Purchases Direct Labor Cost per Hour Total Required Direct Labor Hours Total Pounds Needed for Production Direct Materials per Unit Beginning Direct Materials Expected Unit Sales Required Production Units Beginning Finished Goods Units Desired Ending Finished Goods Units Total Required Units Desired Ending Direct Materials

[Entry field with correct answer]

[Entry field with correct answer]

[Entry field with correct answer] Add Less

:

[Entry field with correct answer] Cost per Pound Beginning Finished Goods Units Required Production Units Total Pounds Needed for Production Beginning Direct Materials Total Required Direct Labor Hours Direct Labor Time per Unit Expected Unit Sales Total Required Units Direct Materials per Unit Direct Materials Purchases Desired Ending Direct Materials Total Cost of Direct Materials Purchases Desired Ending Finished Goods Units Direct Labor Cost per Hour Total Direct Labor Cost Total Materials Required

[Entry field with correct answer]

[Entry field with correct answer]

[Entry field with correct answer] Beginning Direct Materials Direct Materials per Unit Direct Labor Cost per Hour Cost per Pound Desired Ending Direct Materials Direct Materials Purchases Desired Ending Finished Goods Units Beginning Finished Goods Units Expected Unit Sales Required Production Units Total Materials Required Total Required Direct Labor Hours Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Pounds Needed for Production Direct Labor Time per Unit Total Required Units

[Entry field with correct answer]

[Entry field with correct answer]

[Entry field with correct answer] Add Less

:

[Entry field with correct answer] Direct Labor Cost per Hour Total Materials Required Beginning Direct Materials Total Pounds Needed for Production Cost per Pound Total Required Direct Labor Hours Direct Labor Time per Unit Beginning Finished Goods Units Total Required Units Direct Materials per Unit Expected Unit Sales Direct Materials Purchases Required Production Units Desired Ending Direct Materials Desired Ending Finished Goods Units Total Cost of Direct Materials Purchases Total Direct Labor Cost

[Entry field with correct answer]

[Entry field with correct answer]

[Entry field with correct answer] Direct Labor Time per Unit Total Direct Labor Cost Cost per Pound Total Required Direct Labor Hours Direct Materials per Unit Direct Labor Cost per Hour Desired Ending Finished Goods Units Total Required Units Total Pounds Needed for Production Beginning Direct Materials Expected Unit Sales Beginning Finished Goods Units Required Production Units Direct Materials Purchases Desired Ending Direct Materials Total Cost of Direct Materials Purchases Total Materials Required

[Entry field with correct answer]

[Entry field with correct answer]

[Entry field with correct answer]

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(b)

Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.)

COOK FARM SUPPLY COMPANY Direct Materials BudgetGumm

June 30, 2017 For the Quarter Ending June 30, 2017 For the Six Months Ending June 30, 2017

Quarter

Six Months

1

2

Total Required Units Direct Labor Cost per Hour Total Pounds Needed for Production Desired Ending Finished Goods Units Total Required Direct Labor Hours Direct Labor Time per Unit Total Direct Labor Cost Expected Unit Sales Units to be Produced Direct Materials per Unit Beginning Direct Materials Beginning Finished Goods Units Desired Ending Direct Materials Cost per Pound Direct Materials Purchases Total Materials Required Total Cost of Direct Materials Purchases

Total Materials Required Desired Ending Direct Materials Cost per Pound Beginning Finished Goods Units Beginning Direct Materials Desired Ending Finished Goods Units Total Required Units Direct Labor Cost per Hour Direct Labor Time per Unit Total Direct Labor Cost Direct Materials per Unit Direct Materials Purchases Total Pounds Needed for Production Expected Unit Sales Total Cost of Direct Materials Purchases Total Required Direct Labor Hours Units to be Produced

Direct Materials Purchases Expected Unit Sales Direct Labor Cost per Hour Desired Ending Direct Materials Beginning Finished Goods Units Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Required Units Units to be Produced Total Materials Required Total Pounds Needed for Production Beginning Direct Materials Total Required Direct Labor Hours Cost per Pound Desired Ending Finished Goods Units Direct Labor Time per Unit Direct Materials per Unit

Add Less

:

Direct Materials Purchases Direct Labor Time per Unit Units to be Produced Beginning Direct Materials Cost per Pound Beginning Finished Goods Units Total Materials Required Desired Ending Direct Materials Desired Ending Finished Goods Units Direct Labor Cost per Hour Total Required Units Direct Materials per Unit Total Pounds Needed for Production Expected Unit Sales Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Required Direct Labor Hours

Direct Labor Cost per Hour Cost per Pound Total Direct Labor Cost Total Cost of Direct Materials Purchases Direct Labor Time per Unit Direct Materials Purchases Desired Ending Finished Goods Units Expected Unit Sales Beginning Direct Materials Direct Materials per Unit Total Materials Required Total Pounds Needed for Production Beginning Finished Goods Units Total Required Direct Labor Hours Total Required Units Units to be Produced Desired Ending Direct Materials

Add Less

:

Total Required Units Total Materials Required Total Pounds Needed for Production Beginning Direct Materials Direct Materials per Unit Beginning Finished Goods Units Total Required Direct Labor Hours Units to be Produced Cost per Pound Desired Ending Direct Materials Expected Unit Sales Desired Ending Finished Goods Units Direct Labor Cost per Hour Direct Labor Time per Unit Direct Materials Purchases Total Cost of Direct Materials Purchases Total Direct Labor Cost

Direct Materials per Unit Total Pounds Needed for Production Direct Materials Purchases Total Required Direct Labor Hours Total Materials Required Total Required Units Desired Ending Finished Goods Units Units to be Produced Expected Unit Sales Beginning Finished Goods Units Beginning Direct Materials Cost per Pound Desired Ending Direct Materials Direct Labor Cost per Hour Direct Labor Time per Unit Total Direct Labor Cost Total Cost of Direct Materials Purchases

Total Materials Required Direct Materials per Unit Cost per Pound Units to be Produced Direct Labor Time per Unit Total Direct Labor Cost Beginning Finished Goods Units Total Cost of Direct Materials Purchases Desired Ending Finished Goods Units Beginning Direct Materials Desired Ending Direct Materials Direct Materials Purchases Expected Unit Sales Direct Labor Cost per Hour Total Pounds Needed for Production Total Required Direct Labor Hours Total Required Units

$

$

Direct Materials Purchases Direct Labor Time per Unit Desired Ending Finished Goods Units Total Materials Required Cost per Pound Beginning Finished Goods Units Units to be Produced Expected Unit Sales Desired Ending Direct Materials Direct Materials per Unit Direct Labor Cost per Hour Total Cost of Direct Materials Purchases Total Direct Labor Cost Total Pounds Needed for Production Beginning Direct Materials Total Required Direct Labor Hours Total Required Units

$

$

$

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

June 30, 2017 For the Quarter Ending June 30, 2017 For the Six Months Ending June 30, 2017

Quarter

Six Months

1

2

Total Required Units Direct Materials Purchases Total Direct Labor Cost Total Required Direct Labor Hours Units to be Produced Direct Labor Cost per Hour Desired Ending Direct Materials Expected Unit Sales Total Cost of Direct Materials Purchases Beginning Direct Materials Beginning Finished Goods Units Total Materials Required Cost per Pound Direct Materials per Unit Direct Labor Time per Unit Desired Ending Finished Goods Units Total Pounds Needed for Production

Total Pounds Needed for Production Total Cost of Direct Materials Purchases Total Required Units Expected Unit Sales Desired Ending Finished Goods Units Total Direct Labor Cost Direct Labor Cost per Hour Units to be Produced Beginning Direct Materials Beginning Finished Goods Units Cost per Pound Desired Ending Direct Materials Total Required Direct Labor Hours Direct Materials per Unit Direct Labor Time per Unit Direct Materials Purchases Total Materials Required

Units to be Produced Cost per Pound Beginning Direct Materials Total Required Units Total Required Direct Labor Hours Beginning Finished Goods Units Expected Unit Sales Desired Ending Finished Goods Units Direct Labor Cost per Hour Desired Ending Direct Materials Direct Labor Time per Unit Direct Materials per Unit Direct Materials Purchases Total Direct Labor Cost Total Cost of Direct Materials Purchases Total Materials Required Total Pounds Needed for Production

Direct Materials Purchases Direct Labor Time per Unit Direct Materials per Unit Total Required Units Desired Ending Finished Goods Units Total Cost of Direct Materials Purchases Cost per Pound Expected Unit Sales Units to be Produced Total Direct Labor Cost Total Materials Required Total Pounds Needed for Production Total Required Direct Labor Hours Direct Labor Cost per Hour Beginning Direct Materials Beginning Finished Goods Units Desired Ending Direct Materials

$

$

Cost per Pound Desired Ending Direct Materials Total Cost of Direct Materials Purchases Units to be Produced Desired Ending Finished Goods Units Direct Materials per Unit Total Required Direct Labor Hours Total Direct Labor Cost Direct Labor Cost per Hour Total Required Units Direct Labor Time per Unit Total Materials Required Total Pounds Needed for Production Beginning Direct Materials Direct Materials Purchases Expected Unit Sales Beginning Finished Goods Units

$

$

$

Prepare the selling and administrative expense budget.

COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget

For the Six Months Ending June 30, 2017 For the Quarter Ending June 30, 2017 June 30, 2017

Quarter

Six Months

1

2

Variable Cost Budgeted sales in dollars Total Fixed Cost

Variable Cost Fixed Cost Total Budgeted sales in dollars

$

$

$

Fixed Cost Total Variable Cost Budgeted sales in dollars

Fixed Cost Variable Cost Budgeted sales in dollars Total

$

$

$

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(c)

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