Cook farm Supply Company manufactures and sells a pesticide called Snare. The fo

Question

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 Sales: quarter 1, 28,000 bags; quarter 2, 43,300 bags. Selling price is 63 per ba 2 Direct materiais each beg of Seace requires4 pounds of Gumm it a cost of $3.8 per pound and 6 pounds of Tarr at $1.50 pr 3. Desired inventory levels 1 April Snare (bags) Gumm (pounds) tarr (pounds) 8,400 12,500 18,400 ,500 10,300 13,400 14,500 20,100 25,100 4 Direct labor: direct labor 15 5. Seling and adniustroeve expenses aro expected to be 15% or ws plus $177,000 per omaer. 6 Interest expense is $100,000 7. Income time is 15 minutes per bag at an hourly rate of $14 per hour tases are expected to be 30% of income before income taxes Your asustaent has pregared two budgets: (3) the manfcturing overthead budget shows espected costs to be 125% of divect labon for Terr shows the cost of Tarr purchases to be $300,000 in

Explanation / Answer

Explanation

Cook farm supply company
Budgeted incomme staement Sales 4491900 COGS 2349335 GP 2142565 Selling & administrative expense 1027785 Income from operations 1114780 Interest expense 100000 Income before tax 1014780 Income tax expense @ 30% 304434 Net Income 710346

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