Question 34:

Sunland Farm Supply Company manufactures and sells a fertilizer called Snare. The following data are available for preparing budgets for Snare for the first two quarters of 2022.

1.Sales: Quarter 1, 27,000 bags; quarter 2, 42,000 bags. Selling price is $58 per bag.

2.Direct materials: Each bag of Snare requires 4 kg of Gumm at $4.00 per kilogram and 6 kg of Tarr at $1.50 per kilogram.

3.Desired inventory levels:

\fSUNLAND FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 Quarter Six 1 2 Months Expected sales in units Unit selling price $ $ $ Total sales $SUNLAND FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter Six 1 2 Months Add Total required units Required production in units Beginning finished goods inventory Expected unit sales Desired ending finished goodsSUNLAND FARM SUPPLY COMPANY Direct Labour Budget For the Six Months Ending June 30, 2022 Quarter Six 2 Months Direct labour cost per hour Units to be produced Direct labour hours per unit Total cost of direct labour Total required for productionSUNLAND FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2022 Quarter 2 Months S Direct materials per unit Desired ending Inventory Total required for production Cost per kilogram Direct materials purchases Total cost of materials purchases Units to be produced Total materials required Beginning inventorySUNLAND FARM SUPPLY COMPANY Selling and Administrative Expenses Budget For the Six Months Ending June 30, 2022 Quarter Six 1 2 Months Variable costs Expected sales Fixed costs Total selling and admin costsSUNLAND FARM SUPPLY COMPANY Budgeted Income Statement For the Six Months Ending June 30, 2022 Less AddCost of goods sold Selling and administrative expenses Cost of goods available for sale Ending inventory Income tax expense Beginning inventory Purchases Sales Gross profit Income before income taxes Net loss Net income