Type of Inventory January 1 April 1 July 1 Warning Don\'t show me this message a
ID: 2500214 • Letter: T
Question
Type of Inventory
January 1
April 1
July 1
Warning
Don't show me this message again for the assignment
Ok
Cancel
(a)
GLENDO FARM SUPPLY COMPANY
Sales Budget
For the Six Months Ending June 30, 2014
Quarter
Six
Months
1
2
Expected unit sales
Unit selling price
Total sales
GLENDO FARM SUPPLY COMPANY
Production Budget
For the Six Months Ending June 30, 2014
Quarter
Six
Months
1
2
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, 29,200 bags; quarter 2, 42,200 bags. Selling price is $61 per bag. 2. Direct materials: Each bag of Snare requires 4 pounds of Gumm at a cost of $4 per pound and 8 pounds of Tarr at $1.75 per pound. 3. Desired inventory levels:
Type of Inventory
January 1
April 1
July 1
Snare (bags) 8,300 12,400 18,200 Gumm (pounds) 9,400 10,300 13,300 Tarr (pounds) 14,500 20,200 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 $299,000 in quarter 1 and $426,000 in quarter 2.
Warning
Don't show me this message again for the assignment
Ok
Cancel
Explanation / Answer
(a)
GLENDO FARM SUPPLY COMPANY
Sales Budget
For the Six Months Ending June 30, 2014
Quarter 1
Quarter 2
Six Months
Expected unit sales (A)
29200
42200
71400
Unit selling price (B)
$ 61
$ 61
$ 61
Total sales =A*B
$ 1,781,200
$ 2,574,200
$ 4,355,400
(b)
GLENDO FARM SUPPLY COMPANY
Production Budget
For the Six Months Ending June 30, 2014
Quarter 1
Quarter 2
Six Months
Expected unit sales (A)
29,200
42,200
71,400
Add: Desired Ending Finished Goods Units
12,400
18,200
Total Required Units
41,600
60,400
Less: Beginning Finished Goods Units
(8,300)
(12,400)
Required Production Units
33,300
48,000
81,300
(a)
GLENDO FARM SUPPLY COMPANY
Sales Budget
For the Six Months Ending June 30, 2014
Quarter 1
Quarter 2
Six Months
Expected unit sales (A)
29200
42200
71400
Unit selling price (B)
$ 61
$ 61
$ 61
Total sales =A*B
$ 1,781,200
$ 2,574,200
$ 4,355,400
(b)
GLENDO FARM SUPPLY COMPANY
Production Budget
For the Six Months Ending June 30, 2014
Quarter 1
Quarter 2
Six Months
Expected unit sales (A)
29,200
42,200
71,400
Add: Desired Ending Finished Goods Units
12,400
18,200
Total Required Units
41,600
60,400
Less: Beginning Finished Goods Units
(8,300)
(12,400)
Required Production Units
33,300
48,000
81,300
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.