Glendo 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 2014.

1.

Sales: quarter 1, 28,100 bags; quarter 2, 43,100 bags. Selling price is $63 per bag.

2.

Direct materials: Each bag of Snare requires 5 pounds of Gumm at a cost of $4 per pound and 8 pounds of Tarr at $1.50 per pound.

3.

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

4

Direct labor: Direct labor time is 15 minutes per bag at an hourly rate of $14 per hour.

5.

Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter.

6.

Income taxes are expected to be 30% of income from operations

Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected costs to be 150% of direct labor cost. (2) The direct materials budget for Tarr shows the cost of Tarr purchases to be $300,000 in quarter 1 and $424,000 in quarter 2.

Questions-

Prepare the sales budget for Glendo Farm Supply Company Sales Budget for the Six Months Ending June 30, 2014

Expected sales for quarter 1, quarter 2, six months

Unit selling price quarter 1, quarter 2, six months

Total Sales quarter 1, quarter 2, six months

Prepare the production budget

Prepare the direct materials budget

4.Prepare the selling and administrative budget

5. Prepare the budgeted income statement