Sunland 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 2022. 1. Sales: quarter 1, 29,600 bags; quarter 2, 44,000 bags. Selling price is $63 per bag. 2. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.8 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,200 12,300 18,100 Gumm (pounds) 9,300 10,100 13,300 Tarr (pounds) 14,300 20,300 25,200 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 $180,000 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 $300,000 in quarter 1 and $423,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Prepare the sales budget. Expected Unit Sales Unit Selling Price Total Sales GA SUNLAND FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 Quarter 1 2 29600 63 1864800 +A 44000 63 2772000 +A Six Months 73600 63 4636800 Prepare the production budget. Expected Unit Sales Add : Desired Ending Finished Goods Units Total Required Units SUNLAND FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter 1 2 29600 12300 41900 44000 18100 62100 Less Beginning Finished Goods Units 8200 i 12300 i Required Production Units 33700 49800 Your answer is partially correct. Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) SUNLAND FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2022 Units to be Produced Direct Materials per Unit Total Pounds Needed for Production Quarter 1 2 33700 5 168500 49800 5 249000 Add Desired Ending Direct Materials (Pounds) 10100 13300 Total Materials Required 178600 262300 Less Beginning Direct Materials (Pounds) 9300 i 10100 i Beginning Direct Materials (Pounds) Materials Purchases r Pound >st of Direct Materials Purchases A $ +A 9300 i 10100 i 169300 3.80 643340 +A 252200 3.80 $ 958360 +A Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) Total Required Direct Labor Hours Direct Labor Time (Hours) per Unit Total Direct Labor Cost Direct Labor Cost per Hour Total Direct Labor Cost SUNLAND FARM SUPPLY COMPANY Direct Labor Budget For the Six Months Ending June 30, 2022 Quarter 1 2 33700 0.25 49800 0.25 8425 12450 16 16 $ 134800 $ 199200 $ Si Mor SUNLAND FARM SUPPLY COMPANY Selling and Administrative Expense Budget For the Six Months Ending June 30, 2022 1 Quarter 2 Budgeted Sales in Units $ Variable Expenses Fixed Expenses Total Selling and Administrative Expenses 1864800 $ 279720 180000 EA $ 459720 +A +A $ 2772000 A 415800 $ 180000 595800 Mc