Problem 22-01A Cook Form Supply Company manufactures and sells a pesticide called Snore. The following data are available for preparing budgets for Snace for the first 2 quarters of 2000 1. Sales: quarter 1, 28,600 bago: quarter 2,43,400 bag. Selling price is $62 per bag, 2. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarrat 51.50 per pound 3. Desired inventory levels Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8,400 9,400 14,300 April 1 12,300 10,500 20,400 July 1 18,300 13,500 25,100 4. Direct labori 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 $170,000 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 $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter 2 SIK Months 26600 Sales 43400 72000 CALCULATOR COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter 1 2 Six Months Expected Unit Sales 28600 43400 72000 Unit Selling Price $ 62 62 62 Total Sales 1773200 2690800 4464000 Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter Six Months 1 2 Expected Unit Sales 28600 43400 Add Desired Ending Finished Goods Units 12300 18300 Total Required Units 40900 61700 Less Beginning Finished Goods Units -3400 - 12300 32500 49400 81900 Required Production Units Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter Six Months 1 2 > > > Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter SIX Months 1 2 1773200 2690800 4464000 Sales 265980 403620 669600 Variable Expenses 178000 178000 356000 Fixed Expenses 443980 581620 1025600 Total Selling and Administrative Expenses