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Glendo Farm Supply Company manufactures and sells a pesticide

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Question;Glendo 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 2014.;1.;Sales: Quarter 1, 28,800 bags, quarter;2, 43,200 bags. Selling price is $61 per bag.;2.;Direct materials: Each bag of Snare requires 5 pounds;of Gumm at a cost of $4 per pound and 8 pounds of Tarr at;$1.50 per pound.;3.;Desired inventory levels;Type of Inventory;January 1;April 1;July 1;Snare (bags);8,200;12,200;18,300;Gumm (pounds);9,300;10,300;13,500;Tarr (pounds);14,400;20,100;25,500;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.;Income taxes are expected to be 30% of income from operations.;Your assistant has prepared two budgets: (1) The manufacturing overhead budget;shows expected costs to be 150% of direct labor cost. (2) The direct materials;budget for Tarr shows the cost of Tarr purchases to be $302,000 in quarter;1 and $426,000 in quarter 2.;Warning;Don't show;me this message again for the assignment

 

Paper#39840 | Written in 18-Jul-2015

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