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ek 7 - Assignment: Company Master Budget On 1 of 1 <> cies -/1 Attempt in Progress rse Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for prepari s for Snare for the first 2 quarters of 2025. Sales: quarter 1,28,400 bags; quarter 2, 42,600 bags. Selling price is $61 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 pound. Desired inventory levels: of Inventory January 1 April 1 July 1 (bags) (pounds) 8,400 12,300 18,100 9,200 10,200 13,400 pounds) 14,500 20,200 25,300 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter. Interest expense is $100,000 for the 2 quarters. Income taxes are expected to be 20% of income before income taxes. sistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct! ad (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $303,000 in quarter 1 and $425,500 in 2. Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

ek 7 - Assignment: Company Master Budget On 1 of 1 <> cies -/1 Attempt in Progress rse Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for prepari s for Snare for the first 2 quarters of 2025. Sales: quarter 1,28,400 bags; quarter 2, 42,600 bags. Selling price is $61 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 pound. Desired inventory levels: of Inventory January 1 April 1 July 1 (bags) (pounds) 8,400 12,300 18,100 9,200 10,200 13,400 pounds) 14,500 20,200 25,300 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter. Interest expense is $100,000 for the 2 quarters. Income taxes are expected to be 20% of income before income taxes. sistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct! ad (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $303,000 in quarter 1 and $425,500 in 2. Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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ek 7 - Assignment: Company Master Budget On 1 of 1 <> cies -/1 Attempt in Progress rse Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for prepari s for Snare for the first 2 quarters of 2025. Sales: quarter 1,28,400 bags; quarter 2, 42,600 bags. Selling price is $61 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 pound. Desired inventory levels: of Inventory January 1 April 1 July 1 (bags) (pounds) 8,400 12,300 18,100 9,200 10,200 13,400 pounds) 14,500 20,200 25,300 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter. Interest expense is $100,000 for the 2 quarters. Income taxes are expected to be 20% of income before income taxes. sistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct! ad (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $303,000 in quarter 1 and $425,500 in 2. Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
Transcribed Image Text:ek 7 - Assignment: Company Master Budget On 1 of 1 <> cies -/1 Attempt in Progress rse Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for prepari s for Snare for the first 2 quarters of 2025. Sales: quarter 1,28,400 bags; quarter 2, 42,600 bags. Selling price is $61 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.75 pound. Desired inventory levels: of Inventory January 1 April 1 July 1 (bags) (pounds) 8,400 12,300 18,100 9,200 10,200 13,400 pounds) 14,500 20,200 25,300 Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter. Interest expense is $100,000 for the 2 quarters. Income taxes are expected to be 20% of income before income taxes. sistant has prepared two budgets: (1) the manufacturing overhead budget shows expected costs to be 125% of direct! ad (2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $303,000 in quarter 1 and $425,500 in 2. Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
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