Solve case 1

Oakbrook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing the budget for Snare for the first two quarters of the current year: Sales: Quarter 1, 35, 000 bags, Quarter 2, 50, 000 bags. Selling price is $60 per bag. Direct Materials: Each bag of Snare requires 5 pounds of Gumm at a cost of $3 per pound and 8 pounds of Tarr at $1.50 per pound. Desired inventory levels: Direct Labor: DL time is 15 minutes per bag at an hourly rate of $12 per hour. Selling and Admin Expenses (SG&A) are to be expected to be 8% of sales plus $175, 000 per quarter. Income taxes are expected to be 30% of income from operations. Your assistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 150% of direct labor costs, and (2) the direct materials budget for Tarr shows the cost of Tarr to be $477, 000 in Quarter1 and $697, 500 in Quarter 2. Instructions: Prepare the income statement for the first six months and all required supporting budgets by quarter and total