Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are avallable for preparing budgets for Snare for the first 2 quarters of 2020. 1. 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 $3.80 per pound and 6 pounds of Tarr at 2. $1.75 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,200 12,200 18,100 Gumm (pounds) 9,100 10,400 13,300 Tarr (pounds) 14,500 20,400 25,200 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 $180,000 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

Cook Farm Supply Company manufactures and sells a pesticide called Snare. The following data are avallable for preparing budgets for Snare for the first 2 quarters of 2020. 1. 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 $3.80 per pound and 6 pounds of Tarr at 2. $1.75 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,200 12,200 18,100 Gumm (pounds) 9,100 10,400 13,300 Tarr (pounds) 14,500 20,400 25,200 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 $180,000 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

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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Shadee Corporation expects to sell 550 sun shades in May and 430 in June. Each shade sells for $146. Shadee's beginning and ending finished goods inventories for May are 85 and 60 shades, respectively. Ending finished goods inventory for June will be 55 shades. E8-8 (Algo) Preparing Cost of Goods Sold Budget [LO 8-3f] Each shade requires a total of $50.00 in direct materials that includes 4 adjustable poles that cost $10.00 each. Shadee expects to have 130 in direct materials inventory on May 1, 80 poles in inventory on May 31, and 110 poles in inventory on June 30. Suppose that each shade takes three direct labor hour to produce and Shadee pays its workers $14 per hour. Additionally, Shadee's fixed manufacturing overhead is $10,000 per month, and variable manufacturing overhead is $15 per unit produced. Use the information and solutions presented to complete the requirements. Required: 1. Determine Shadee's budgeted manufacturing cost per shade. (Note: Assume that fixed overhead per…
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, 28,000 bags; quarter 2, 43,400 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) 8,400 12,500 18,400 Gumm (pounds) 9,500 10,300 13,400 Tarr (pounds) 14,500 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.…
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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, 28,600 bags; quarter 2, 43,400 bags. Selling price is $62 per bag. 2. Direct materials: each bag of Snare requires 5 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) 8,400 12,300 18,300 Gumm (pounds) 9,400 10,500 13,500 Tarr (pounds) 14,300 20,400 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 $178,000 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…
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