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budgets for Snare for the first 2 quarters of 2022. 1 2 3 Type of Inventory January 1 Snare (bags) Gumm (pounds) Tarr (pounds) 4. 51 6. ctures and sells a pesticide called snar 7 Sales: quarter 1, 28,200 bags; quarter 2. 42.400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 per pound. Desired inventory levels: April 1 12,200 8,200 9,100 10,400 14,500 20,400 July 1 18,100 followin 13,300 25,200 Dic for preparing Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter, Interest expense is $100,000. Income taxes are expected to be 20% of income before income taxes

budgets for Snare for the first 2 quarters of 2022. 1 2 3 Type of Inventory January 1 Snare (bags) Gumm (pounds) Tarr (pounds) 4. 51 6. ctures and sells a pesticide called snar 7 Sales: quarter 1, 28,200 bags; quarter 2. 42.400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 per pound. Desired inventory levels: April 1 12,200 8,200 9,100 10,400 14,500 20,400 July 1 18,100 followin 13,300 25,200 Dic for preparing Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter, Interest expense is $100,000. Income taxes are expected to be 20% of income before income taxes

FINANCIAL ACCOUNTING
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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Prepare The Direct Materials Budget. 

Sheridan 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 2022. 1 2 3 Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) 4. 5. 6. Sales quarter 1, 28,200 bags; quarter 2. 42.400 bags. Selling price is $63 per bag Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 per pound. Desired inventory levels: 7. January 1 April 1 8,200 12,200 9,100 10,400 14,500 20,400 July 1 18,100 13,300 25,200 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter, Interest expense is $100,000. Income taxes are expected to be 20% of income before income taxes.
Transcribed Image Text:Sheridan 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 2022. 1 2 3 Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) 4. 5. 6. Sales quarter 1, 28,200 bags; quarter 2. 42.400 bags. Selling price is $63 per bag Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 per pound. Desired inventory levels: 7. January 1 April 1 8,200 12,200 9,100 10,400 14,500 20,400 July 1 18,100 13,300 25,200 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $180,000 per quarter, Interest expense is $100,000. Income taxes are expected to be 20% of income before income taxes.
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