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Crane 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 2022. 1. Sales: quarter 1, 28,000 bags; quarter 2,43,400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of 2. Tarr at $1.50 per pound. s of G 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,400 12,500 18.400 Gumm (pounds) 9,500 10,300 13,400 Tarr (pounds) 14,500 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 © Quarter Six 2 Months Expected Unit Sales 71400 28000 43400 Unit Selling Price $ 63 63 63 Total Sales 1764000 2734200 %24 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter Expected Unit Sales 28000 Add : Desired Ending Finished Goods Units 12500 Total Required Units 40500 Less : Beginning Finished Goods Units (8400 (12500 Required Production LUnite

Crane 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 2022. 1. Sales: quarter 1, 28,000 bags; quarter 2,43,400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 6 pounds of 2. Tarr at $1.50 per pound. s of G 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,400 12,500 18.400 Gumm (pounds) 9,500 10,300 13,400 Tarr (pounds) 14,500 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 © Quarter Six 2 Months Expected Unit Sales 71400 28000 43400 Unit Selling Price $ 63 63 63 Total Sales 1764000 2734200 %24 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter Expected Unit Sales 28000 Add : Desired Ending Finished Goods Units 12500 Total Required Units 40500 Less : Beginning Finished Goods Units (8400 (12500 Required Production LUnite

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter7: Budgeting
Section: Chapter Questions
Problem 1PA: Lens Junction sells lenses for $45 each and is estimating sales of 15,000 units in January and...
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Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) CRANE FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter Six Month 2 $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) CRANE FARM SUPPLY COMPANY Direct Labor Budget Quarter Six 1 2 Months $ $ $ $ Prepare the selling and administrative expense budget. CRANE FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six 2 Months %24 %24 eTextbook and Media Save for Later Attempts: 0 of 5 used Submit Answer
Transcribed Image Text:Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.) CRANE FARM SUPPLY COMPANY Direct Materials Budget-Gumm Quarter Six Month 2 $ Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, e.g. for 45 minutes the proportion will be 0.75.) CRANE FARM SUPPLY COMPANY Direct Labor Budget Quarter Six 1 2 Months $ $ $ $ Prepare the selling and administrative expense budget. CRANE FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six 2 Months %24 %24 eTextbook and Media Save for Later Attempts: 0 of 5 used Submit Answer
Crane 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 2022. 1. Sales: quarter 1, 28,000 bags; quarter 2,43,400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm ata cost of $4 per pound and 6 pounds of 2. Tarr at $1.50 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,400 12,500 18,400 Gumm (pounds) 9,500 10,300 13,400 Tarr (pounds) 14,500 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 o Quarter Six 1 2 Months Expected Unit Sales o 28000 43400 71400 Unit Selling Price 24 63 %24 63 %24 63 Total Sales 24 $ $ 1764000 2734200 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter 1 2 Expected Unit Sales 28000 45 Add o Desired Ending Finished Goods Units 12500 18 Total Required Units 40500 61 Less : Beginning Finished Goods Units (8400) i (12500 Required Production Units 32100 45
Transcribed Image Text:Crane 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 2022. 1. Sales: quarter 1, 28,000 bags; quarter 2,43,400 bags. Selling price is $63 per bag. Direct materials: each bag of Snare requires 4 pounds of Gumm ata cost of $4 per pound and 6 pounds of 2. Tarr at $1.50 per pound. 3. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Snare (bags) 8,400 12,500 18,400 Gumm (pounds) 9,500 10,300 13,400 Tarr (pounds) 14,500 20,100 25,100 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 $177,000 per quarter. 6. Interest expense is $100,000. 7. Income taxes are expected to be 20% 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 $300,000 in quarter 1 and $424,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) (a) V Your answer is correct. Prepare the sales budget. CRANE FARM SUPPLY COMPANY Sales Budget For the Six Months Ending June 30, 2022 o Quarter Six 1 2 Months Expected Unit Sales o 28000 43400 71400 Unit Selling Price 24 63 %24 63 %24 63 Total Sales 24 $ $ 1764000 2734200 4498200 Prepare the production budget. CRANE FARM SUPPLY COMPANY Production Budget For the Six Months Ending June 30, 2022 Quarter 1 2 Expected Unit Sales 28000 45 Add o Desired Ending Finished Goods Units 12500 18 Total Required Units 40500 61 Less : Beginning Finished Goods Units (8400) i (12500 Required Production Units 32100 45
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