Question 1 of 2 - / 10 Cook Farm Supply Company manufactures and sells a pesticide called Smare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2020, 1. Sales: quarter 1, 29,400 bags: quarter 2,42,400 bags. Selling price is $63 per bag Direct materials: each bag of Snare requires a pounds of Gummat a cost of $3.00 per pound and pounds of fart at $1.50 per pound 3 Desired inventory levels 2 Type of Inventory January 1 April 1 July 1 8,500 Snare (bags) 12.200 18.500 10.400 9.300 13.100 Gumm (pounds) 20.500 25.300 14.400 Tarr (pounds) 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 5176.000 per quarter, Interest expense is $100.000 6 -/10 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. 5. 6. Selling and administrative expenses are expected to be 15% of sales plus 5176,000 per quarter. Interest expense is $100,000 Income taxes are expected to be 30% of income before income taxes 7 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 Tare purchases to be $298,000 in quarter 1 and 5423,500 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 -710 E Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter SIX Months 1 2 71800 29400 42400 Expected Unit Sales : 63 $ 63 $ 63 $ 2 Unit Selling Price $ 2671200 4523400 $ 1852200 Total Sales Prepare the production budget. COOK FARM SUPPLY COMPANY untion Budget ./10 COOK FARM SUPPLY COMPANY Production Budget For the Sox Months Endine June 30, 2020 Quarter Expected Unit Sales 29600 42400 Add: Desired Ending Finished Goods Units . 1 12200 18500 Total Required Units 41600 A500 12200 Less Beginning Finished Goods Units 33100 4200 Required Production Units e Textbook and Media 1 COOK FARM SUPPLY COMPANY Direct Materials Budget-Gunim Quarter $ 9 1 $ B. Ps -/10 Quarter 2 Six Months . : $ $ $ 5 - / 10 COOK FARM SUPPLY COMPANY Direct Labor Budget : Quarter 2. SH Mont $ $ Prepare the selling and administrative expense budget O FARM SUPPLY COMPANY 11 /10 COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter SA Months 2. $ Textbook and Media - / 10 COOK FARM SUPPLY COMPANY Budgeted Income Statement : I 13
