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ACC - Glendo Farm Supply Company




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, 28,900 bags, quarter 2, 42,000 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 7 pounds of Tarr at $1.75 per pound.3.;Desired inventory levels;Type of;Inventory;January;1;April;1;July;1Snare (bags);8,400;12,100;18,300Gumm (pounds);9,300;10,500;13,200Tarr (pounds);14,300;20,300;25,2004.;Direct labor: Direct labor time is 15 minutes per bag at an hourly rate of;$14 per hour.5.;Selling and administrative expenses are expected to be 15% of sales plus;$178,000 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 $301,000 in quarter 1 and $424,000 in quarter 2.Prepare the sales budget.Prepare the production budget.


Paper#42092 | Written in 18-Jul-2015

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