Reference no: EM131550718

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, 29,800 bags; quarter 2, 42,400 bags. Selling price is $62 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:

Type of Inventory

January 1

April 1

July 1

Snare (bags)8,10012,10018,100Gumm (pounds)9,50010,30013,100Tarr (pounds)14,10020,10025,200

4.Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour.5.Selling and administrative expenses are expected to be 15% of sales plus $179,000 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 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.)

Prepare the budgeted multiple-step income statement for the first 6 months. (Round intermediate calculations to 2 decimal places and final answer to 0 decimal places, e.g. 1,255.)