Question 4 of 5 28.64/30 I: Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the rst 2 quarters of 2022. 1. Sales: quarter 1, 40,000 bags; quarter 2, 56,000 bags. Selling price is $60 per bag. 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 January 1 April 1 July 1 Snare (bags) 8,000 15,000 18,000 Gumm (pounds) 9,000 10,000 13,000 Tarr (pounds) 14,000 20,000 25,000 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 $175,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $297,000 in quarter 1 and $439,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Ta rr.) Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2022 6 Quarter Six 2 Months 1 nses c ] $ 175,000 $ 175,000 $ 350,000 g and Administrative Expenses ] $ 535,000 $ 679,000 $ 1,214,000 eTextbook and Media Save for Later Attempts: 3 of 5 used Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to O decimal places, e.g. 1,255.) COOK FARM SUPPLY COMPANY Budgeted Income Statement For the Six Months Ending June 30, 2022 4 Sales LA 5,760,000 Cost of Goods Sold 3187,200 Gross Profit 2572,800 Selling and Administrative Expenses 1214,000 Income from Operations 1358,800 Interest Expense 100,000 Income Before Income Tax 1258,800 Income Tax Expense 377,640 Net Income / (Loss) $ 881,160