P21-1A Prepare budgeted income statement and supporting budgets. 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 20127. 1. Sales: quarter 1, 40,000 bags; quarter 2, 56,000 bags. Selling price is S60 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 Snare (bags) Gumm (pounds) Tarr (pounds) January 1 April 1 July1 15,000 10,000 20,000 8,000 9,000 14,000 18,000 13,000 25,000 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 $175,000 per quarter. 56. 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 9 costs to be 125% of direct labor cost, and (2) The direct materials budget for Tarr shows the cost of Tarr 0 purchases to be $297,000 in quarter 1 and S439,500 in quarter 2 2 Instructions 3 Prepare the budgeted multi-step income statement for the first 6 months and all required operating budgets by 4 quarters. (Note: Use variable and fixed in the selling and administrative expense budget.) Do not 5 prepare the manufacturing overhead budget or the direct materials budget for Tarr. 6 NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "2" 27