Problem 22-01A 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 2020. 1. sales: quarter 1, 29,800 bags, quarter 2, 42,400 bags. Selling price is $62 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 8,300 9,300 14,300 April 1 12,400 10,500 20,400 July 1 18,100 13,300 25,400 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 $178,000 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 $300,000 in quarter 1 and $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) COOK FARM SUPPLY COMPANY Direct Labor Budget . Quarter Six Months 1 2 $ Prepare the selling and administrative expense budget. ECES sk Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Study Quarter Six Months 1 2 Prepare the budgeted multiple-step income statement for the first 6 months. (Round Intermediate calculations 18 20 o decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement . Work for this question Open Show Work