I really just need help with this last section. I have already answered the other parts correctly. Please include detail of how to get the numbers for the income statement as well please :)
*Problem 22-01A 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 2020. 1. Sales: quarter 1, 28,400 bags; quarter 2, 43,800 bags. Selling price is $61 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) Gumm (pounds) Tarr (pounds) 8,500 9,300 14,200 12,100 10,500 20,100 18,100 13,100 25,100 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 $177,000 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 $301,000 in quarter 1 and $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Your answer is correct. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter Six - 2 Months Expected Unit Sales 728400 743800 772200) TUnit Selling Price $161 $161 Total Sales $11732400 $2671800 $14404200 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Six Months Expected Unit Sales 28400 143800 TAdd: Desired Ending Finished Goods Units T12100) T18100 TTotal Required Units Less: Beginning Finished Goods Units 740500 761900 78500) 712100) 32000 49800 Required Production Units 81800 Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2020 Quarter Six 2 Months TUnits to be produced 32000 49800 Direct Materials per Unit Total Pounds Needed for Production TAdd: Desired Ending Direct Materials (Pounds) TTotal Materials Required 1128000 410500 4138500 7300 4129200 1199200 113100 312300 110500 201800 TLess. Beginning Direct Materials (Pounds) Direct Materials Purchases Cost per Pound $ 3.80 $13.80) Total Cost of Direct Materials Purchases) 4909605766840 51257800 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, 2020 Quarter Six Months 1 2 TUnits to be produced 32000 149800 Direct Labor Time (Hours) per Unit) 1.25 T.25 Total Required Direct Labor Hours 8000) 12450 Direct Labor Cost per Hour $(16 $[16 Total Direct Labor Cost 51128000 $199200 51327200) Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2020 Quarter Six Months 1 2 Sales ST1732400 $72671800) $14404200 TVariable Expenses $1259860 $/4007- T660630) Fixed Expenses 1177000 177000 1354000 1436860) Total Selling and Administrative Expenses $75777701 14630 Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to 0 decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement For the Six Months Ending June 30, 2020 TSales $14404200 Cost of Goods Sold TGross Profit Selling and Administrative Expenses 71014630 Income from Operations Interest Expense Income Before Income Tax Income Tax Expense Net Income / (Loss) Question Attempts: Unlimited
