ACCT2031 Case Study 2 Caprie Pets Food Company manufactures and sells dog food called Caprie Supreme. The following data are available for preparing budgets for Caprie Supreme for the first 2 quarters...

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ACCT2031 Case Study 2 Caprie Pets Food Company manufactures and sells dog food called Caprie Supreme. The following data are available for preparing budgets for Caprie Supreme for the first 2 quarters of 2019. 1. Sales: quarter 1 – 40,000 bags; quarter 2 – 50,000 bags. Selling price is $63 per bag. 1. Direct materials: each bag of Caprie Supreme requires 5 pounds of protein at a cost of $3.80 per pound and 10 pounds of carbohydrates at $1.50 per pound. 1. Desired inventory levels: Type of Inventory January 1 April 1 July 1 Bags 10,000 15,000 20,000 Protein (pounds) 9,000 12,000 15,000 Carbohydrates (pounds) 15,000 20,000 25,000 1. Direct labour: direct labour time is 15 minutes per bag at an hourly rate of $12 per hour. 1. Interest expense is $70,000. 1. Income taxes are expected to be 30% of income before income taxes. The direct labour budget shows expected costs to be $135,000 in quarter 1 and 165,000 in quarter 2. The selling and administrative expenses budget shows expected costs to be $402,000 in quarter 1 and $465,000 in quarter 2. The manufacturing overhead budget shows expected costs to be 100% of direct labour cost. The direct materials budget for carbohydrates shows the cost of carbohydrates to be $682,500 in quarter 1 and $832,500 in quarter 2. Instructions: 1. Prepare the sales budget for the first 6 months of 2019 by quarters. 1. Prepare the production budget for the first 6 months of 2019 by quarters. 1. Prepare the direct materials budget for the first 6 months of 2019 by quarters. 1. Prepare the budgeted income statement for the first 6 months of 2019. ~End of Assignment 2~