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 $$)$

Sales, Q$1$

Sales, Q$2$

Required Units, Q$1$

Required Units, Q$2$

Required Units, Q$1$ and Q$2$

Required production in units, Q$1$

Required production in units, Q$2$

Hours required for production, Q$1$

Hours required for production, Q$2$

Cost of direct labour, Q$1$

Cost of direct labour, Q$2$

Materials required $($kg$),$ Q$1$

Materials required $($kg$),$ Q$2$

Costs of materials purchases, Q$1$

Cost of materials purchases, Q$2$

Selling and admin costs, Q$1$

Selling and admin costs, Q$2$

Cost of $1$ unit of finished goods

Cost of goods sold

Gross profit

Net income

Group of answer choices

$$780,000$

$40,000$

$$2,224,000$

$60,000$

$$37\mathrm{.}75$

$$33\mathrm{.}75$

$32,000$

$$525,000$

$$2,362,500$

$52,000$

$8,000$

$$47\mathrm{.}25$

$$1,680,000$

$$2,520,000$

$10,000$

$12,000$

$205,000$

$$600,250$

$$427,000$

$$112,000$

$$168,000$

$48,000$

$138,000$

$$27\mathrm{.}70$

$$553,000$

$$516,000$

$$1,975,000$

$$1,712,500$

$88,000$

$$1,837,500$