Igloo Co$.$ manufactures and sells a rubber for boots $($in bags$),$ called Rubbs. The following data are available for preparing budgets for Rubbs for the first two quarters of $2023.$

Sales: Quarter $1,28,000$ bags; quarter $2,42,000$ bags.

Selling price is $$60$ per bag.

Direct materials: Each bag of Rubbs requires $4$ kg of Aces at $$4$ per kilogram and $6$ kg of Zeds at $$1\mathrm{.}50$ per kilogram.

Desired inventory levels:

Type of Inventory January $1$ April $1$ July $1$

Rubbs $($bags$)8,00012,00018,000$

Aces $($kg$)9,00010,00013,000$

Zeds $($kg$)14,00020,00025,000$

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

The company expects selling and administrative expenses to be $15\%$ of sales plus $$175,000$ per quarter.

It expects income taxes to be $30\%$ of income from operations.

Your assistant has prepared two budgets:

$(1)$ the manufacturing overhead budget, which shows expected costs to be $150\%$ of direct labour cost;

$(2)$ the direct materials budget for Zeds, which shows the cost of Zeds purchases to be $$297,000$ in quarter $1$ and $$439,500$ in quarter $2.$

Instructions

Prepare the budgeted income statement for the first six months and all required operating budgets by quarters and answer the following questions; $($Note all dollar figures will have $$)$