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, 29,500 bags; quarter 2, 42,100 bags. Selling price is $62 per bag.
2.		Direct materials: Each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.50 per pound.
3.		Desired inventory levels:

Type of Inventory		January 1		April 1		July 1
Snare (bags)		8,300		12,400		18,400
Gumm (pounds)		9,200		10,500		13,400
Tarr (pounds)		14,100		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 $177,000 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 $299,000 in quarter 1 and $426,000 in quarter 2.

(a) Prepare the sales budget. GLENDO FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2014 uarter Six Months 2 Expected unit sales Unit selling price Total sales Prepare the production budget GLENDO FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2014 Quarter Six Months 1 2 Direct Materials per Unit