Problem 24-01A a-c (Part Level Submission) (Video) 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, 28,600 bags; quarter 2, 43,400 bags. 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 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) 8,400 9,400 14,300 12,300 10,500 20,400 18,300 13,500 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 $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 $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.) (a) Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget Quarter Six Months 2 Prepare the production budget. Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget Quarter Six Months 1 2