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, 29,800 bags; quarter 2,42,400 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) 8,100 12,100 18,100 Gumm (pounds) 9,500 10,300 13,100 Tarr (pounds) 14,100 20,100 25,200 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 $179,000 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 $303,000 in quarter 1 and $422,500 in quarter 2. COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2017 Quarter Six Months Units to be produced Direct Materials per Unit Total Pounds Needed for Production - Add : Desired Ending Direct Materials Total Materials Required Less Beginning Direct Materials Direct Materials Purchases Cost per Pound Total Cost of Direct Materials Purchases 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, 2017 Quarter Six Months 1 Units to be Produced Direct Labor Time per Unit Total Required Direct Labor Hours Direct Labor Cost per Hour Total Direct Labor Cost $ COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2017 Quarter Six Months Budgeted sales in units Variable Cost Fixed Cost Total 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