Problem 9-1A 2017 1. Sales: quarter 1, 28,000 bags; quarter 2, 42,000 bags. Selling price is $61 per bag. 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 2. Direct materials: each bag of Snare requires 4 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 Snare (bags) Gumm (pounds) Tarr (pounds) uly 1 8,100 12,100 18,100 10,100 13,100 14,100 20,100 25,100 9,100 4. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $14 per hour. S. Selling and a 6. Interest expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes. expenses are expected to be 15% of sales plus $176,000 per quarter. verhead budget shows expected costs to be 125% of direct labor cost, and (2) the direct materials budget Your assistant has prepared two budgets: (1) the manufacturing for Tarr shows the cost of Tarr purchases to be $298,000 in quarter 1 and $422,500 in quarter 2 (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) COOK FARM SUPPLY COMPANY Sales Budget Quarter Six Months 2 Expected unit sales Unit selling price Total sales Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget Quarter Six Months 2 COOK FARM SUPPLY COMPANY Direct Materials Budget Gumm Quarter Six Months 2 COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter Six Months 2 COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months 2 COOK FARM SUPPLY COMPANY Budgeted Income Statement