Question

Problem 9-1A (Part Level Submission) (Video) 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 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 Tarr at $1.50 per pound. 3. Desired Inventory levels: Type of Inventory Snare (bags) Gumm (pounds) Tart (pounds) January 1 8,500 9,300 14,200 April 1 12,100 10,500 20,100 July 1 18,100 13,100 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. 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 for Tarr shows the cost of Tarr purchases to be $301,000 in quarter and $427,500 in quarter 2 (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Your answer is partially correct. Try again Prepare the sales budget COOK FARM SUPPLY COMPANY MacBook

Answer 1

D הפוס в с Cook Farm Supply Company Sales Budget Quarter 1 2 28,400 43,800 $61 $61 $1,732.400 $2.671,800 Six Months 72,200 Expected unit sales Unit selling price Total Sales $61 $4,404,200 Production Budget Quarter 1 12 Expected unit sales 13 Add: Desired Ending Finished Goods units 14 Total Reuired Units 15 Less: Beginning Finished Goods units 16 Required Production Units 28,400 12.100 40,500 8,500 2 43,800 18,100 61.900 12,100 Six Months 72.200 18.100 90.300 8,500 Six Months 81,800 Direct Materials Budget Quarter 1 2 21 Units to be produced 32,000 49,800 22 Direct Materials per unit 4 23 Total Pounds Needed for production 128,000 199,200 24 Add: Desired Ending Direct Materials 10,500 13.100 25 Total Materials Reuired 138,500 212,300 26 Less: Beginning Direct Materials 9,300 10,500 27 Direct Materials Purchases 129,200 201,800 28 Cost per Pound $3.80 $3.80 29 Total Cost of Direct Materials Purchases $490.960 $766,840 327,200 13.100 340,300 9,300 331,000 $3.80 $1,257,800 30

Cook Farm Supply Company Sales Budget Quarter Six Months =SUM(B5.C5) 28400 43800 5 6 7 Expected unit sales Unit selling price Total Sales 61 =B5*B6 =C5*C6 =D5*D6 11 Production Budget Quarter Six 11 Months 12 Expected unit sales 28400 43800 =SUM(B12:C12) 13 Add: Desired Ending Finished Goods units 12100 18100 =C13 14 Total Reuired Units =B12+B13 =C12+C13 =D12+D13 15 Less: Beginning Finished Goods units 8500 12100 =B15 16 Required Production Units =B14-B15 =C14-C15 =D14-D15 0 Direct Materials Budget 19 Quarter Six 2 Months 21 Units to be produced =B16 =C16 =SUM(B21:021) 22 Direct Materials per unit 23 Total Pounds Needed for production =B21 B22 =C21*C22 =D21 D22 24 Add: Desired Ending Direct Materials 10500 13100 =C24 25 Total Materials Reuired =B23+B24 =C23+C24 =D23+D24 26 Less: Beginning Direct Materials 9300 10500 =B26 27 Direct Materials Purchases =B25-B26 =C25-C26 =D25-D26 28 Cost per Pound 3.8 3.8 29 Total Cost of Direct Materials Purchases =B27*B28 =C27*C28 =D27*D28 30 3.8

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