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 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 $299,000 in quarter 1 and $426,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) 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.) Please provide calculations underneath for how you get the numbers for the multiple-step income statement please
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 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 $299,000 in quarter 1 and $426,500 in quarter 2.
(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
Prepare the
Please provide calculations underneath for how you get the numbers for the multiple-step income statement please
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