Can you please include the formulas on how to find each thing? Prepare budgeted
ID: 2529188 • Letter: C
Question
Can you please include the formulas on how to find each thing?
Prepare budgeted income statement and supporting budgets. 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, 40,000 bags; quarter 2, 56,000 bags. Selling price is $60 per bag. 2. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. 3. Direct Materials cost per bag of Snare is $24.20 5. Selling and administrative expenses are expected to be 15% of sales plus fixed expenses of $175,000 per quarter. 6. Interest Expense is $100,000. 7. Income taxes are expected to be 30% of income before income taxes. Your assistant has prepared the manufacturing overhead budget shows expected costs to be 125% of direct labor cost. Inventory facts: Type of Inventory Snare (bags) Remember that beginning inventory in a period is equal to the ending inventory in the prior period nstructions Prepare the budgeted multi-step income statement for the first 6 months and all required operating budgets by quarters. (Note: Use variable and fixed in the selling and administrative expense budget.) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr. 8,000 18,000Explanation / Answer
Production Budgtet 1 2 Six months Units to be sold S 40000 56000 96000 Ending Inventory 15000 18000 18000 Total Finised Goods 55000 74000 114000 Less: Beginning Inventory 8000 15000 8000 Units to be produced 47000 59000 106000 ans Direct labor Budget 1 2 Six months Units to be produced A 47000 59000 106000 Direct labor hours per unit required B 0.25 0.25 0.25 Budgeted direct labor hours required D= A*B 11750 14750 26500 Wage per direct labor hour C $16 $16 $16 Budgeted Direct labor cost D* C $188,000 $236,000 $424,000 ans 3 Selling & administrative budget Budgetd sales (sales units*60) 2400000 3360000 5760000 Variable (.15*Sales) 360000 504000 864000 Fixed 175000 175000 350000 Total 535000 679000 1214000 Cost per bag Cost element Qty Unit cost Total Direct material 1 $24.20 $24.20 Direct labor 0.25 16 $4.00 manufacturing overhead $5.00 (.25*16*125%) Total $33.20 ans 4 Budgeted Income statement Sales Revenue 5760000 Less: cost of good sold (33.2*96000) $3,187,200 Gross profit $2,572,800 Selling & administrative expenses 1214000 Income from operation $1,358,800 Interest expenses 100000 Income Before Income tax $1,258,800 Income tax expenses (30%*I) $377,640 Net Income $881,160