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. s of G 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.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 © Quarter Six 2 Months Expected Unit Sales 71400 28000 43400 Unit Selling Price $ 63 63 63 Total Sales 1764000 2734200 %24 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter Expected Unit Sales 28000 Add : Desired Ending Finished Goods Units 12500 Total Required Units 40500 Less : Beginning Finished Goods Units (8400 (12500 Required Production LUnite
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. s of G 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.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 © Quarter Six 2 Months Expected Unit Sales 71400 28000 43400 Unit Selling Price $ 63 63 63 Total Sales 1764000 2734200 %24 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter Expected Unit Sales 28000 Add : Desired Ending Finished Goods Units 12500 Total Required Units 40500 Less : Beginning Finished Goods Units (8400 (12500 Required Production LUnite
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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