Cullumber 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 $2022.$

Sales: quarter $1,29,400$ bags; quarter $2,42,400$ bags. Selling price is $$63$ per bag.

Direct materials: each bag of Snare requires $4$ pounds of Gumm at a cost of $$4$ per pound and $6$ pounds of Tarr

at $$1\mathrm{.}5$ per pound.

Desired inventory levels:

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 $$176,000$ per quarter.

Interest expense is $$100,000.$

Income taxes are expected to be $20\%$ 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$)$

Prepare the sales budget.

Prepare the production budget.

CULLUMBER FARM SUPPLY COMPANY

Production Budget

Quarter

$1$