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Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm 1 $ $ COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter 1 2 Quarter $ 2 Six Months

Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm 1 $ $ COOK FARM SUPPLY COMPANY Direct Labor Budget Quarter 1 2 Quarter $ 2 Six Months

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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Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) > $ $ Prepare the selling and administrative expense budget. $ $ $ COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm $ COOK FARM SUPPLY COMPANY Direct Labor Budget 1 $ Quarter $ COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget $ Quarter $ $ 1 $ 2 2 Quarter $ $ $ $ $ $ 2 Six Months Six Months
Transcribed Image Text:Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) > $ $ Prepare the selling and administrative expense budget. $ $ $ COOK FARM SUPPLY COMPANY Direct Materials Budget-Gumm $ COOK FARM SUPPLY COMPANY Direct Labor Budget 1 $ Quarter $ COOK FARM SUPPLY COMPANY Selling and Administrative Expense Budget $ Quarter $ $ 1 $ 2 2 Quarter $ $ $ $ $ $ 2 Six Months Six Months
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. Sales: quarter 1, 29,800 bags; quarter 2, 42,400 bags. Selling price is $62 per bag. 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: 1. 2. Type of Inventory January 1 Snare (bags) Gumm (pounds) Tarr (pounds) 4. 5. 6. April 1 July 1 8,100 12,100 18,100 9,500 10,300 13,100 14,100 20,100 7. 25,200 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 $179,000 per quarter. Interest expense is $100,000. 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 $303,000 in quarter 1 and $422,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
Transcribed Image Text: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. Sales: quarter 1, 29,800 bags; quarter 2, 42,400 bags. Selling price is $62 per bag. 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: 1. 2. Type of Inventory January 1 Snare (bags) Gumm (pounds) Tarr (pounds) 4. 5. 6. April 1 July 1 8,100 12,100 18,100 9,500 10,300 13,100 14,100 20,100 7. 25,200 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 $179,000 per quarter. Interest expense is $100,000. 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 $303,000 in quarter 1 and $422,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)
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