Prepare a direct labor budget for Emeric and Ellie's Painting Service for June $2022.$

P$9\mathrm{.}1($LO $2,3),$ AP 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 $2022.$

Sales: quarter $1,40,000$ bags; quarter $2,56,000$ bags. Selling price is $$60$ per bag.

Direct materials: each bag of Snare requires $4$ pounds of Gumm at a cost of $$3\mathrm{.}80$ per pound and

$6$ pounds of Tarr at $$1\mathrm{.}50$ per pound.

Desired inventory levels:

Direct labor: direct labor time is $15$ minutes per bag at an hourly rate of $$16$ per hour.

Selling and administrative expenses are expected to be $15\%$ of sales plus $$175,000$ per quarter.

Interest expense is $$100,000$ for the $2$ quarters.

Income taxes are expected to be $20\%$ 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 $$297,000$ in quarter $1$ and $$439,500$ in quarter $2.$

Instructions

Prepare the budgeted multiple$-$step income statement for the first $6$ months and all required operating

budgets by quarters. $($Note: Use variable and fixed in the selling and administrative expense budget.$)$ Do

not prepare the manufacturing overhead budget or the direct materials budget for Tarr.

P$9\mathrm{.}2($LO $2,3),$ AP Deleon Inc. is preparing its annual budgets for the year ending December $31,2022.$

Accounting assistants furnish the following data.

Sales budget:

Anticipated volume in units

Unit selling price

Production budget:

Desired ending finished goods units

Beginning finished goods unitsP$9\mathrm{.}1($LO $2,3),$ AP 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 $2022.$

Sales: quarter $1,40,000$ bags; quarter $2,56,000$ bags. Selling price is $$60$ per bag.

Direct materials: each bag of Snare requires $4$ pounds of Gumm at a cost of $$3\mathrm{.}80$ per pound and

$6$ pounds of Tarr at $$1\mathrm{.}50$ per pound.

Desired inventory levels:

Direct labor: direct labor time is $15$ minutes per bag at an hourly rate of $$16$ per hour.

Selling and administrative expenses are expected to be $15\%$ of sales plus $$175,000$ per quarter.

Interest expense is $$100,000$ for the $2$ quarters.

Income taxes are expected to be $20\%$ 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 $$297,000$ in quarter $1$ and $$439,500$ in quarter $2.$

Instructions

Prepare the budgeted multiple$-$step income statement for the first $6$ months and all required operating

budgets by quarters. $($Note: Use variable and fixed in the selling and administrative expense budget.$)$ Do

not prepare the manufacturing overhead budget or the direct materials budget for Tarr.