Problem 21-1A 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 2017. 1. Sales: quarter 1, 28,400 bags; quarter 2, 42,200 bags. Selling price is $62 per bag. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.8 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) Gumm (pounds) Tarr (pounds) 8,500 9,300 14,300 12,300 10,300 20,500 18,100 13,100 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 $176,000 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 $299,000 in quarter 1 and $427,500 in quarter 2. Your answer is partially correct. Try again. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget June 30, 2017 Quarter Six Months Expected unit sales 28400 42200 70600 Unit selling price HIS Total sales 1760800 2616400 377200 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2017 Quarter Six Months Months Expected Unit Sales 28400 28400 42200 Expected Unit Sales add a Desired Ending Finished Goods Unitsa Total Required Units 12300 18100 1 4070 60300 | Less . Beginning Finished Goods Units 8500 12300 Required Production Units 32200 48000 80200 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 For the Six Months Ending June 30, 2017 A Quarter Six Months XFXP $ Your answer is partially correct. Try again. Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to O decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement For the Six Months Ending June 30, 2017 Sales 4377200 T Cost of Goods Sold Gross Profit Selling and Administrative Expenses T 1008580 T Income from Operations Interest Expense 100000 Income Before Income Tax XIRRRRRR Income Tax Expense Net Income / (Loss) Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO TEXT VIDEO: SIMILAR PROBLEM 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 HU Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months X ERRELSE Fixed Cost Total