Problem 21-1A (Part Level Submission) 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, 28,000 bags; quarter 2, 43,000 bags. Selling price is $61 per bag. 2. 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 $1.75 per pound. 3. Desired inventory levels: _ Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8,100 9,200 14,400 April 1 12,400 10,400 20,300 July 1 18,400 13,500 25,300 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $14 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 $302,000 in quarter 1 and $427,500 in quarter 2. (a) Your answer is correct. Prepare the sales budget. Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2017 Quarter Six Months Expected unit sales 28000 43000 71000 Unit selling price 61 Total sales 170800 2623000 4331000 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2017 Quarter 1 Six Months Expected Unit Sales 28000 43000 Add | Desired Ending Finished Goods Units 12400 18400 Total Required Units 40400 61400 Less Less . Beginning Finished Goods Units Beginning Finished Goods Units A C 8 100 0 12400 Required Production Units 32300 49000 81300 Click if you would like to Show Work for this question: Open Show Work (b) 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 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.) 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. Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months Click if you would like to Show Work for this question: Open Show Work