N8 1 P9.1A Prepare budgeted mncome statement and supporting buxdgets 2 Cook Farm Supply Company manufactures and sels a pesticide called Snare. The following n data are available for preparing budgets for Snare for the first 2 quarters of 2017 4 1. Sales, quarter 1, 40,000 bags, quarter 2, 56,000 bags Seling price is $60 per bag s 2. Direct materials each bag of Snare requires 4 pounds of Gumm at a cost of $3 80 per 6 pound and 6 pounds of Tarr at $1.50 per pound 7 3 Desired inventory levels January 1 April 1July 1 8,00015,000 18,000 9,000 10,000 13,000 14,000 20,000 25,000 Type of Inventory 10 Snare (bags) 11 Gumm (pounds) 12 Tar (pounds) 13 14 4 Direct labor direct labor time is 15 minutes per bag at an hourly rate of $16 per hour 15 5 Seling and administrative expenses are expected to be 15% of sales plus S 1 75,000 per quarter 16 6 Interest Expense is $100,000 17 7 Income taxes are expected to be 30% of income before income taxes 18 Your assistant has prepared two budgets. (1) The manufacturing overhead budget shows expected s costs to be 125% of direct labor cost, and (2) The direct materials budget for Tarr shows the cost of Tarr 20 purchases to be $297,000 in quarter 1 and $439,500 in quarter 2 22 Instructions a Prenre the hudneted multi.sten inenme statement for the first 6 mnnths and all reuired oneratino hudnets hw Ready