Options for preparing direct labor budget:
Options for preparing selling & administrative expense budget: 
Current Attempt in Progress Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020. 1. Sales: quarter 1,28,400 bags; quarter 2,43,800 bags. Selling price is $61 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 $1.50 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,500 12,100 18,100 Gumm (pounds) 9,300 10,500 13,100 Tarr (pounds) 14,200 20,100 25,100 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 $177,000 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 manufacturing 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 $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Your answer is correct. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter 2 Six Months Expected Unit Sales 28400 43800 72200 Unit Selling Price 61 $ 61 61 Total Sales 1732400 2671800 4404200 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter Six Months Expected Unit Sales 28400 43800 Add 41: Desired Ending Finished Goods Units 12100 18100 Total Required Units 40500 61900 Less : Beginning Finished Goods Units 8500 12100 Required Production Units 32000 49800 81800 Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter Six Months | A TA Expected Unit Sales Total Direct Labor Cost Desired Ending Finished Goods Units Direct Labor Cost per Hour Direct Labor Time (Hours) per Unit Direct Materials per Unit Total Materials Required Desired Ending Direct Materials (Pounds) Total Pounds Needed for Production Cost per Pound Beginning Finished Goods Units Beginning Direct Materials (Pounds) Total Required Direct Labor Hours Total Required Units Units to be Produced Direct Materials Purchases Total Cost of Direct Materials Purchases Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter Six Months | Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months | A Total Materials Required Direct Materials per Unit Units to be produced Direct Materials Purchases Beginning Direct Materials (Pounds) Total Required Direct Labor Hours Desired Ending Direct Materials (Pounds) Total Pounds Needed for Production Cost per Pound Direct Labor Time (Hours) per Unit Total Cost of Direct Materials Purchases Total Required Units Beginning Finished Goods Units Expected Unit Sales Total Direct Labor Cost Desired Ending Finished Goods Units Direct Labor Cost per Hour Direct Labor Direct Materials Fixed Expenses Production Units Budgeted Sales in Units Total Selling and Administrative Expenses Variable Expenses
