Tilger 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 2020.

1.Sales: Quarter 1, 28,000 bags; quarter 2, 44,000 bags. Selling price is $61 per bag.

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

3.Desired inventory levels:

Type of Inventory. January 1. April 1. July 1

Snare (bags). 9,000 12,000. 18,000

Gumm (kg) 8,000. 9,000. 12,000

Tarr (kg). 13,000. 19,000 26,000

4.Direct labour: Direct labour time is 15 minutes per bag at an hourly rate of $16 per hour.

5.The company expects selling and administrative expenses to be 15% of sales plus $175,000 per quarter.

6.It expects income taxes 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 labour cost. (2) The direct materials budget for Tarr shows the cost of Tarr purchases to be $294,000 in quarter 1 and $437,000 in quarter 2.

Prepare the following operating budgets by quarters. (Note:Classify items as variable and fixed in the selling and administrative expenses budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.

Prepare the sales budget by quarters.

TILGER FARM SUPPLY COMPANY

Sales Budget

For the Six Months Ending June 30, 2020

Quarter Six

1 2 Months

Expected sales in units - - -

Unit selling price $ - -$. $-

Total sales $ - -$. $-

Prepare the production budget by quarters.

TILGER FARM SUPPLY COMPANY

Production Budget

For the Six Months Ending June 30, 2020

Quarter Six

1 2 Months

Expected unit sales

Add. Desired ending finished goods

Total required units

Less. Beginning finished goods inventory

Required production in units

TILGER FARM SUPPLY COMPANY

direct labour budget

For the Six Months Ending June 30, 2020

Quarter Six

1 2 Months

units to be produced

direct labour hours per unit

Total required for prod.

direct labour cost per hour

total cost of direct labour

TILGER FARM SUPPLY COMPANY

direct material Budgets- Gumm

For the Six Months Ending June 30, 2020

Quarter Six

1 2 Months

units to be produced

direct materials per unit

Total required for prod.

ADD. desired ending inventory

total required for production

less. Beginning inventory

cost per kilo

total cost of materials purchases

TILGER FARM SUPPLY COMPANY

selling and admin expenses budget

For the Six Months Ending June 30, 2020

Quarter Six

1 2 Months

expected sales

variable cpsts

fixed cost

total selling and admin cost