Novak Farm Supply Company manufactures and sells a fertilizer called Snare. The following data are available for preparing budgets for Snare for the first two quarters of 2022.

1.	Sales: Quarter 1, 30,000 bags; quarter 2, 43,000 bags. Selling price is $60 per bag.
2.	Direct materials: Each bag of Snare requires 4 kg of Gumm at $4.00 per kilogram and 6 kg of Tarr at $1.50 per kilogram.
3.	Desired inventory levels:

Type of Inventory		January 1			April 1		July 1
Snare (bags)		9,000			14,000		20,000
Gumm (kg)		8,000			11,000		12,000
Tarr (kg)		13,000			21,000		23,000

4.	Direct labour: Direct labour time is 15 minutes per bag at an hourly rate of $12.00 per hour.
5.	The company expects selling and administrative expenses to be 15% of sales plus $174,000 per quarter.
6.	It expects income taxes to be 30% of income from operations.

Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected costs to be 150% of direct labour cost. (2) The direct materials budget for Tarr shows the cost of Tarr purchases to be $295,000 in quarter 1 and $437,000 in quarter 2. Prepare the following operating budgets by quarters. (Note: Classify items as variable and fixed in the selling and administrative expenses budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.

Prepare the sales budget by quarters.

NOVAK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022
		Quarter
		1		2		Six Months
Expected sales in units		enter a number of units		enter a number of units		enter a number of units
Unit selling price		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
Total sales		$enter a total dollar amount		$enter a total dollar amount		$enter a total dollar amount

Prepare the production budget by quarters.

NOVAK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022
	Quarter
		1		2		Six Months
select an opening production budget item Required production in unitsTotal required unitsExpected unit salesDesired ending finished goodsBeginning finished goods inventory		enter a number of units		enter a number of units		enter a number of units
select between addition and deduction LessAdd: select a production budget item Beginning finished goods inventoryRequired production in unitsExpected unit salesTotal required unitsDesired ending finished goods		enter a number of units		enter a number of units		enter a number of units
select a summarizing line for the first part Desired ending finished goodsExpected unit salesRequired production in unitsBeginning finished goods inventoryTotal required units		enter a total number of units for the first part		enter a total number of units for the first part		enter a total number of units for the first part
select between addition and deduction LessAdd: select a production budget item Total required unitsBeginning finished goods inventoryDesired ending finished goodsRequired production in unitsExpected unit sales		enter a number of units		enter a number of units		enter a number of units
select a closing production budget item Beginning finished goods inventoryRequired production in unitsExpected unit salesTotal required unitsDesired ending finished goods		enter a total number of units		enter a total number of units		enter a total number of units

Prepare the direct labour budget by quarters. (Round direct labour hours per unit to 2 decimal places, e.g. 0.15.)

NOVAK FARM SUPPLY COMPANY Direct Labour Budget For the Six Months Ending June 30, 2022
		Quarter
		1		2		Six Months
select an opening direct labour budget item Units to be producedDirect labour hours per unitDirect labour cost per hourTotal cost of direct labourTotal required for production		enter a number of units		enter a number of units		enter a number of units
select a labour budget item Total cost of direct labourDirect labour hours per unitUnits to be producedTotal required for productionDirect labour cost per hour		enter a number of hours rounded to 2 decimal places		enter a number of hours rounded to 2 decimal places		enter a number of hours rounded to 2 decimal places
select a summarizing line for the first part Total required for productionDirect labour cost per hourTotal cost of direct labourDirect labour hours per unitUnits to be produced		enter a total number of hours for the first part		enter a total number of hours for the first part		enter a total number of hours for the first part
select a labour budget item Total required for productionDirect labour cost per hourUnits to be producedDirect labour hours per unitTotal cost of direct labour		$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 2 decimal places
select a closing direct labour budget item Direct labour cost per hourDirect labour hours per unitTotal cost of direct labourUnits to be producedTotal required for production		$enter a total dollar amount		$enter a total dollar amount		$enter a total dollar amount