Question 4 of 4 -/1 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. 2. Sales: quarter 1, 29,200 bags: quarter 2,43,200 bags. Selling price is $61 per bag. 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. Desired inventory levels: 3. Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) January 1 8.400 9,200 14,300 April 1 12,200 10,200 20,400 July 1 18,200 13.500 25,400 4. 5. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter. Interest expense is $100,000 Income taxes are expected to be 30% of income before income taxes. 6. 7. Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct labor Tarr (pounds) 14.300 20,400 25,400 4. & wioN Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter. Interest expense is $100,000 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 $301,000 in quarter 1 and $425,500 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 Endine June 30, 2020 Quarter Six Question 4 of 4 -/1 E Prepare the sales budget. COOK FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2020 Quarter 2 Six Months Expected Unit Sales 29,200 43,200 72.400 Unit Selling Price $ 61 $ 61 $ 81 Total Sales $ 1,781.200 $ 2,635,200 4,416,400 Prepare the production budget COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter Prepare the production budget. COOK FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2020 Quarter 1 Si Mor 2 cted Unit Sales 29.200 43.200 Desired Ending Finished Goods Units 12.200 18,200 Required Units 41,400 61.400 : Beginning Finished Goods Units 8.400 12.200 Required Units 33,000 49.200 e Textbook and Media Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, eg. 52.70.) Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, eg. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2020 Quarter 1 2 Units to be produced 33,000 49,200 Direct Materials per Unit 5 5 Total Materials Required 1,65,000 2,46,000 Add: Desired Ending Finished Goods Units 10,200 13,500 $ $ $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, eg for 45 minutes the proportion will be 7 -/1 Question 4 of 4 III Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, 8.for 45 minutes the proportion will be 0.750) COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter Six Monti 1 2 $ s $ Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter $ Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter 2 Six Months $ $ $ e Textbook and Media Question 4 of 4 Prepare the budgeted multiple-step income statement for the first 6 months. (Round Intermediate and final answer to 0 decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement
