Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are avaliable for preparing budgets for Snare for the first 2 quarters of 2020.

1. Sales: quarter 1, 40,000 bags; quarter 2, 56,000 bags. Selling price is $60 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)	8,000	15,000	18,000
Gumm (pounds)	9,000	10,000	13,000
Tarr (pounds)	14,000	20,000	25,000

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 $175,000 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 costs of Tarr purchases to be $297,000 in quarter 1 and $439,500 in quarter 2.

Instructions: Prepare the budgeted multi-step income statement for the first 6 months and all required operating budgets by quarters. (Note: Use variable and fixed in the selling and administrative expense budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr