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Problem 13-1 Grouper Company manufactures and sells a pesticide called Share. The following data are available for preparing budgets for Snare for the first 2 quarters of 2017. 1. Sales: quarter 1, 28,200 bags; quarter 2, 42,300 bags. Selling price is $63 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 $1.75 per pound. 3. Desired inventory levels: Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8,200 9,100 14,500 April 1 12,200 10,400 20,400 July 1 18,100 13,300 25,200 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 $180,000 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 manufacturino 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 $422,500 in quarter 2. Prepare the sales budget. GROUPER COMPANY Sales Budget Quarter Six Months 11 2 Expected unit sales Unit selling price $ $ $ Total sales $ Prepare the production budget. GROUPER COMPANY Production Budget Quarter 1 Six Months 2 Prepare the direct materials budget. (Round Cost per pound answers to decimal places .. 5270) Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) GROUPER COMPANY Direct Materials Budget-Gumm Quarter Six Months 1 2 > V $ $ $ 3 $ $ $ Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 1.255.) GROUPER COMPANY Budgeted Income Statement C > > Cliclif