193.png - Question 5 Cook Farm Supply Company manufactures...

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Unformatted text preview: Question 5 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 2017. 1. Sales: quarter 1, 28.500 bags; quarter 2, 42,500 bags. Selling price is $62 per bag. 2. Direct materials: each bag of Share requires 4 pounds of Gumm at a oost of $3.8 per pound and 6 pounds of Tarr at $1.50 per pound. 3. Desired inventory levels: Tune of Inventory January 1 April 1 July 1 Share (bags) 8,100 12,400 18,500 Gumm (pounds) 9,100 10,300 13,200 Tarr (pounds) 14,300 20,300 25,500 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 $177,000 per quarter. Interest expense is $100,000. Income taxes are expected to be 30% of income before income taxes. 3499".“ Your assistant has prepared two budgets: (l) the manufacturing overhead budget shows expected oosts to be 125% of direct labor cost. and {2) the direct materials budget for Tarr shows the cost of Tarr purchases to be $299,000 in quarter 1 and $425,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) ...
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  • Fall '09
  • 1981, 1979, 1983, Tarr

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