Problem 9-1A (Part Level Submission) Cook Farm Supply Company manufactures and s

Question

Problem 9-1A (Part Level Submission)

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.

Type of Inventory

January 1

April 1

July 1

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 $426,500 in quarter 2.

1. Sales: quarter 1, 29,100 bags; quarter 2, 42,200 bags. Selling price is $63 per bag. 2. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $3.8 per pound and 6 pounds of Tarr at $1.50 per pound. 3. Desired inventory levels:

Explanation / Answer

Answer:

Cook Farm Supply Company Sales Budget Quarter 1 2 Total Expected unit sales 29100 42200 71300 Unit Selling price 63 63 Total sales 1833300 2658600 4491900

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