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, 42,000 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) 8,100 12,100 18,100 Gumm (pounds) 9,100 10,100 13,100 Tarr (pounds) 14,100 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 $176,000 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 $298,000 in quarter 1 and $422,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget choose the accounting period Quarter Six Months 1 2 select an opening labor budget item enter a number of units enter a number of units select a labor budget item enter a number of hours enter a number of hours select a summarizing line for the first part enter a total number of hours for the first part enter a total number of hours for the first part select a labor budget item $enter a dollar amount $enter a dollar amount select a closing labor budget item $enter a total dollar amount $enter a total dollar amount $enter a total dollar amount Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget choose the accounting period Quarter Six Months 1 2 select an item enter a total number of units enter a total number of units enter a total number of units select an item $enter a dollar amount $enter a dollar amount $enter a dollar amount select an item enter a dollar amount enter a dollar amount enter a dollar amount select a closing budget item $enter a total dollar amount $enter a total dollar amount $enter a total dollar amount eTextbook and Media Assistance Used eTextbook 1 eTextbook 2 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.) COOK FARM SUPPLY COMPANY Budgeted Income Statement choose the accounting period select an income statement item $enter a dollar amount select an income statement item enter a dollar amount select a summarizing line for the first part enter a total amount for the first part select an income statement item enter a dollar amount select a summarizing line for the second part enter a total amount for the second part select an income statement item enter a dollar amount select a summarizing line for the third part enter a total amount for the third part select an income statement item enter a dollar amount select a closing name for the budgeted income statement $enter a total net income or loss amount
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, 42,000 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) 8,100 12,100 18,100 Gumm (pounds) 9,100 10,100 13,100 Tarr (pounds) 14,100 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 $176,000 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 $298,000 in quarter 1 and $422,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) COOK FARM SUPPLY COMPANY Direct Labor Budget choose the accounting period Quarter Six Months 1 2 select an opening labor budget item enter a number of units enter a number of units select a labor budget item enter a number of hours enter a number of hours select a summarizing line for the first part enter a total number of hours for the first part enter a total number of hours for the first part select a labor budget item $enter a dollar amount $enter a dollar amount select a closing labor budget item $enter a total dollar amount $enter a total dollar amount $enter a total dollar amount Prepare the selling and administrative expense budget. COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget choose the accounting period Quarter Six Months 1 2 select an item enter a total number of units enter a total number of units enter a total number of units select an item $enter a dollar amount $enter a dollar amount $enter a dollar amount select an item enter a dollar amount enter a dollar amount enter a dollar amount select a closing budget item $enter a total dollar amount $enter a total dollar amount $enter a total dollar amount eTextbook and Media Assistance Used eTextbook 1 eTextbook 2 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.) COOK FARM SUPPLY COMPANY Budgeted Income Statement choose the accounting period select an income statement item $enter a dollar amount select an income statement item enter a dollar amount select a summarizing line for the first part enter a total amount for the first part select an income statement item enter a dollar amount select a summarizing line for the second part enter a total amount for the second part select an income statement item enter a dollar amount select a summarizing line for the third part enter a total amount for the third part select an income statement item enter a dollar amount select a closing name for the budgeted income statement $enter a total net income or loss amount
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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, 42,000 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) | 8,100 | 12,100 | 18,100 | |||
Gumm (pounds) | 9,100 | 10,100 | 13,100 | |||
Tarr (pounds) | 14,100 | 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 $176,000 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
(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.)
Prepare the selling and administrative expense budget.
COOK FARM SUPPLY COMPANY
Direct Labor Budget choose the accounting period |
||||||
---|---|---|---|---|---|---|
Quarter
|
Six
Months |
|||||
1
|
2
|
|||||
select an opening labor budget item
|
enter a number of units
|
enter a number of units
|
||||
select a labor budget item
|
enter a number of hours | enter a number of hours | ||||
select a summarizing line for the first part
|
enter a total number of hours for the first part
|
enter a total number of hours for the first part
|
||||
select a labor budget item
|
$enter a dollar amount | $enter a dollar amount | ||||
select a closing labor budget item
|
$enter a total dollar amount | $enter a total dollar amount | $enter a total dollar amount |
Prepare the selling and administrative expense budget.
COOK FARM SUPPLY COMPANY
Selling and Administrative Expense Budget choose the accounting period |
||||||
---|---|---|---|---|---|---|
Quarter
|
Six
Months |
|||||
1
|
2
|
|||||
select an item | enter a total number of units | enter a total number of units | enter a total number of units | |||
select an item
|
$enter a dollar amount
|
$enter a dollar amount
|
$enter a dollar amount
|
|||
select an item
|
enter a dollar amount | enter a dollar amount | enter a dollar amount | |||
select a closing budget item
|
$enter a total dollar amount | $enter a total dollar amount | $enter a total dollar amount |
eTextbook and Media
Assistance Used
- eTextbook 1
- eTextbook 2
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.)
COOK FARM SUPPLY COMPANY
choose the accounting period |
||
---|---|---|
select an income statement item
|
$enter a dollar amount
|
|
select an income statement item
|
enter a dollar amount | |
select a summarizing line for the first part
|
enter a total amount for the first part
|
|
select an income statement item
|
enter a dollar amount | |
select a summarizing line for the second part
|
enter a total amount for the second part
|
|
select an income statement item
|
enter a dollar amount | |
select a summarizing line for the third part
|
enter a total amount for the third part
|
|
select an income statement item
|
enter a dollar amount | |
select a closing name for the budgeted income statement
|
$enter a total net income or loss amount |
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