a. Prepare the direct materials budget. (Round Cost per pound answers to 2 decimal places, e.g. 52.70.)

b. 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.)

c. Prepare the selling and administrative expense budget.

Ivanhoe 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. 2. Sales: quarter 1, 28,400 bags; quarter 2, 42,200 bags. Selling price is $62 per bag. Direct materials: each bag of Snare requires 5 pounds of Gumm at a cost of $4 per pound and 6 pounds of Tarr at $1.50 per pound. Desired inventory levels: 3. January 1 April 1 July 1 8,500 12,300 18,100 Type of Inventory Snare (bags) Gumm (pounds) Tarr (pounds) 9,300 10,300 13,100 14,300 20,500 25,100 4. 5. Direct labor: direct labor time is 15 minutes per bag at an hourly rate of $16 per hour. Selling and administrative expenses are expected to be 15% of sales plus $176,000 per quarter. Interest expense is $100,000. Income taxes are expected to be 20% of income before income taxes. 6. 7. 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 $299,000 in quarter 1 and $427,500 in quarter 2. (Note: Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr.) IVANHOE FARM SUPPLY COMPANY Direct Materials Budget-Gumm For the Six Months Ending June 30, 2022 Quarter 1 2 Units to be produced 32200 48000 Direct Materials per Unit 5 5 Total Materials Required 161000 240000 Add : Desired Ending Direct Materials (Pounds) 10,300 13100 Total Materials Required 171300 253100 Less Beginning Direct Materials (Pounds) 9,300 10300 Units to be produced 162000 242800 Cost per Pound $ 4 $ 4. Total Cost of Direct Materials Purchases $ 648000 $ 97120 Prepare the direct labor budget. (Enter Direct labor time per unit in proportion to hours, eg. for 45 minutes the proportion IVANHOE FARM SUPPLY COMPANY Direct Labor Budget Quarter 1 2 Prepare the selling and administrative expense budget IVANHOE FARM SUPPLY COMPANY Selling and Administrative Expense Budget Quarter Six Months 1 2 $ $ $ $ $ $