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Cullumber 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 2025.

1. ???Sales: quarter 1, 29,400 bags; quarter 2, 42,400 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 Tarr at $1.50 per
2. ???pound.

3. Desired inventory levels:

Type of Inventory	January 1 April 1		July 1
Snare (bags)	8.500	12,200	18.500
Gumm (pounds) |		9,300 10,400	13,100
Tarr (pounds)		14,400 20,500 25,300

1. ???Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour.
2. ???Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter.
3. ???Interest expense is $100,000 for the 2 quarters.
4. ???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 $298,000 in quarter 1 and $423,500 in quarter

(Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.)

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