Crane 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. Sales: quarter 1, 28,000 bags; quarter 2, 43,400 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 2. 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 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

Crane 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. Sales: quarter 1, 28,000 bags; quarter 2, 43,400 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 2. 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 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 11MCQ

See similar textbooks

Similar questions

Income statmentBalance sheetNo statment
Accounting Question
which of the following comes first in the income statement O a. finance cost O b. gross profit O C. C. cost of sales O d. distribution cost
operation. AA, BB, and CC agree to sell construction tools for a period of one month. AA agrees to construct a stand on the front lawn of CC. CC will be paid P3,000 for cleaning up the lawn after the one-month selling period. AA, BB, and CC decide that net income, if any will be allocated first to the P3,000 payment to CC and then by a 40% commission on individual sales. The balance will be distributed 75% to AA and 25% to BB. They agree that a cash box will complicate the matters and that all purchases and sales transactions will be out-of-pocket and the responsibility of the to be at cost, except individual. Sales to AA, BB, and CC are that the ending inventory may be purchased at 50% of cost. All other sales are to be made at 100% markup on cost. The activity of the joint operation is as follows: a. AA constructed the stand cost of P12,000; b. AA pays for P120,000 P6,000 for permit to on the front lawn at a for various construction tools. operate the concession or business;…
Question 51: In the vertical analysis of an income statement, what is the base (100%) figure? Answer: A. Total expenses B. Total revenues C. Total assets D. Net income
Multiple choice
Sharon Incorporated is headquartered in State X and owns 100 percent of Carol Corporation, Josey Corporation, and Janice Corporation, which form a single unitary group. Assume sales operations are within the solicitation bounds of Public Law 86-272. Each of the corporations has operations in the following states: Domicile State Dividend income Business income Sales: State X Sales: State Y Sales: State Z Sales: State A Sales: State B Property: State X Property: State Y Property: State Z Property: State A Payroll: State X Payroll: State Y Payroll: State Z Payroll: State A Sharon Carol Josey Incorporated Corporation Corporation State X State Y State Z (throwback) (throwback) (nonthrowback) $ 1,490 $ 525 $ 580 46,250 15,500 59,750 20,300 60,500 75,200 21,900 15,900 60,000 65,000 12,300 28,400 93,500 15,500 55,750 13,400 12,500 7,850 28,000 43,500 3, 150 Janice Corporation State Z (nonthrowback) $ 485 15,700 18,600 12,500 11,700 14, 200 25,500 11,100 10, 200 Compute the following for State…
The income statement line gross profit will appear on which income statement format? Select one: a. Receipt and payment account b. Multiple step income statement c. Single step income statement d. Income and expenditure account
22 Operating profit margin is also known as ________________________. a. Earnings before tax b. Earning after interest and tax c. Profit before interest and tax d. Profit after interest and tax
Question: What is the formula for calculating the net profit margin? a. Net Profit / Revenue b. Revenue / Net Profit c. Net Profit / Total Assets d. Total Assets / Net Profit
Bramble Company sells one product. Presented below is information for January for Bramble Company. Jan. 1 Inventory 114 units at $5 each 4 Sale 89 units at $8 each 11 Purchase 156 units at $7 each 13 Sale 126 units at $9 each Purchase 158 units at $7 each 27 Sale 103 units at $11 each Bramble uses the FIFO cost flow assumption. All purchases and sales are on account. 20
How to calculate or compute the operating income and the net income