P12.33A (LO 2, 3) Excel Tilger 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, 28,000 bags; quarter 2, 42,00o bags. Selling price is $60 per bag. 2. Direct materials: Each bag of Snare requires 4kg of Gumm at \$4 per kilogram and 6kg of Tarr at $1.50 per kilogram. 3. Desired inventory levels: 4. Direct labour: Direct labour time is 15 minutes per bag at an hourly rate of $14 per hour. 5. The company expects selling and administrative expenses to be 15% of sales plus $175,000 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, which shows expected costs to be 150% of direct labour cost; (2) the direct materials budget for Tarr, which shows the cost of Tarr 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. (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. Net income: $600,250 Cost per bag: $33.75 Prepare sales, production, direct materials, and direct labour budgets, and a budgeted income statement