Question 9Ayayai Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2017.1. Sales: quarter 1, 28,300 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 January 1 April 1 July 1Snare (bags) 8,500 12,100 18,100Gumm (pounds) 9,300 10,500 13,100Tarr (pounds) 14,200 20,100 25,1004. 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 budget for Tarr shows the cost of Tarr purchases to be $301,000 in quarter 1 and $427,500 in quarter 2. Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answers to 0 decimal places, e.g. 1,255.)AYAYAI COMPANYBudgeted Income Statement$4Show Work is REQUIRED for this question: Open Show Work>> Prepare the selling and administrative expense budget.AYAYAI COMPANYSelling and Administrative Expense BudgetQuarterSix1Months$.$4%24%24%24>>>

1) Sales Budget Particulars Q1 Q2 6 months Expected unit sales 28,300 43,800 72,100 Unit…

Answered: Ayayai Company manufactures and sells a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question 9

Ayayai Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2017.

1.		Sales: quarter 1, 28,300 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	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.

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.

Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answers to 0 decimal places, e.g. 1,255.)
AYAYAI COMPANY
Budgeted Income Statement
$4
Show Work is REQUIRED for this question: Open Show Work
>
>

Prepare the selling and administrative expense budget.
AYAYAI COMPANY
Selling and Administrative Expense Budget
Quarter
Six
1
Months
$.
$4
%24
%24
%24
>
>
>

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