View Policies Current Attempt in Progress 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. Sales: quarter 1, 28,400 bags quarter 2,43,800 bags. Selling price is $61 per bag 2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarrat $1.50 per pound. 3. Desired inventory levels Type of Inventory January 1 April 1 July 1 Snare (bags) 8,500 12,100 18,100 Gumm (pounds) 9,300 10,500 13,100 Tarr (pounds) 14,200 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes 3 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 $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) o 9 ma O hp View Policies Current Attempt in Progress 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. Sales: quarter 1, 28,400 bags quarter 2,43,800 bags. Selling price is $61 per bag 2. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $3.80 per pound and 6 pounds of Tarrat $1.50 per pound. 3. Desired inventory levels Type of Inventory January 1 April 1 July 1 Snare (bags) 8,500 12,100 18,100 Gumm (pounds) 9,300 10,500 13,100 Tarr (pounds) 14,200 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes 3 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 $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) o 9 ma O hp