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, 29,400 bags; quarter 2, 42,400 bags. Selling price is $63 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 Tarr at $1.50 per pound.

3. Desired inventory levels:

Type of Inventory January 1 April 1 July 1

Snare (bags) 8,500 12,200 18,500

Gumm (pounds) 9,300 10,400 13,100

Tarr (pounds) 14,400 20,500 25,300

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 $176,000 per

quarter.

6. Interest expense is $100,000.

7. Income taxes are expected to be 30% 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 $298,000 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.

COOK FARM SUPPLY COMPANY

Sales Budget

choose the accounting period

Quarter Six

Months 1 2

Expe

cted

unit

sales

enter a number of units enter a number of units enter a number of units

Unit

sellin

g

price

$enter a dollar amount $enter a dollar amount $enter a dollar amount

Total

sales

$enter a total dollar

amount

$enter a total dollar

amount

$enter a total dollar

amount

Prepare the production budget.

COOK FARM SUPPLY COMPANY

Production Budget

choose the accounting period

Quarter Six

Months 1 2

select an opening production budget item

enter a

number of

units

enter a

number of

units

select between addition and deduction

: select a

production budget item

enter a

number of

units

enter a

number of

units

select a summarizing line for the first

part

enter a total

number of

units for the

first part

enter a total

number of

units for the

first part

select between addition and deduction

enter a

enter a

: select a

production budget item

number of

units

number of

units

select a closing production budget item

enter a total

number of

units

enter a total

number of

units

enter a

total

number

of units

eTextbook and Media

Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal

places, e.g. 52.70.)

COOK FARM SUPPLY COMPANY

Direct Materials Budget—Gumm

choose the accounting period

Quarter Six

Months 1 2

select an opening direct materials

budget item

enter a number

of units

enter a number

of units

select an item

enter the

amount of

pounds

enter the

amount of

pounds

select a summarizing line for the first

part

enter a total

amount of

pounds for the

first part

enter a total

amount of

pounds for the

first part

select between addition and

deduction

: select an item

enter the

amount of

pounds

enter the

amount of

pounds

select a summarizing line for the

second part

enter a total

amount of

pounds for the

second part

enter a total

amount of

pounds for the

second part

select between addition and

deduction

: select an item

enter the

amount of

pounds

enter the

amount of

pounds

select a summarizing line for the third

part

enter a total

amount of

pounds for the

third part

enter a total

amount of

pounds for the

third part

select an item

$enter a dollar

amount

$enter a dollar

amount

select a closing direct materials budget

item

$enter a total

dollar amount

$enter a total

dollar amount

$enter a

total

dollar

amount

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.)

COOK FARM SUPPLY COMPANY

Direct Labor Budget

choose the accounting period

Quarter Six

Months 1 2

select an opening labor budget

item

enter a number

of units

enter a number

of units

select a labor budget item

enter a number

of hours

enter a number

of hours

select a summarizing line for the

first part

enter a total

number of hours

for the first part

enter a total

number of hours

for the first part

select a labor budget item

$enter a dollar

amount

$enter a dollar

amount

select a closing labor budget

item

$enter a total

dollar amount

$enter a total

dollar amount

$enter a

total dollar

amount

Prepare the selling and administrative expense budget.

COOK FARM SUPPLY COMPANY

Selling and Administrative Expense Budget

choose the accounting period

Quarter Six

Months 1 2

select an item

enter a total

number of units

enter a total

number of units

enter a total

number of units

select an item

$enter a dollar

amount

$enter a dollar

amount

$enter a dollar

amount

select an item

enter a dollar

amount

enter a dollar

amount

enter a dollar

amount

select a closing budget item

$enter a total

dollar amount

$enter a total

dollar amount

$enter a total

dollar amount

eTextbook and Media

Prepare the budgeted multiple-step income statement for the first 6 months. (Round

intermediate calculations to 2 decimal places and final answer to 0 decimal

places, e.g. 1,255.)

COOK FARM SUPPLY COMPANY

Budgeted Income Statement

choose the accounting period

select an income statement item

$enter a dollar amount

select an income statement item

enter a dollar amount

select a summarizing line for the first part

enter a total amount for the

first part

select an income statement item

enter a dollar amount

select a summarizing line for the second part

enter a total amount for the

second part

select an income statement item

enter a dollar amount

select a summarizing line for the third part

enter a total amount for the

third part

select an income statement item

enter a dollar amount

select a closing name for the budgeted income statement

$enter a total net income

or loss amount