Finished Components $\backslash$table$[[$Indirect labor,,$41,000,],[$Payroll taxes and fringe benefits,,$300,000,],[$Maintenance costs,,$10,080,],[$Heat$,$ light, and power,,$11,000,],[$Total variable factory overhead,$$,378,380,],[$Reduction rate for variable OH costs,,,$\%],[$Budgeted variable OH$,$$$,340,542,],[$Original fixed OH :$],[$Supervision$,$$$,150,000,],[$Maintenance costs,,$16,000,],[$Heat$,$ light, and power,,$43,370,],[$Total cash fixed factory overhead,$$,209,370,],[$Reduction Rate for Cash Fixed OH Costs,,,$\%],[$Budgeted Cash Fixed OH$,,209,370,],[,,,],[,,,],[$Total budgeted fixed OH$,$$$,209,370,],[$Total bugdeted factory OH$,$$$,549,912,]]$

C$12$ D$57$

Requirements for each finished component:

RM $110$ pounds $8$ pounds

RM $204$ pounds

RM $32$ pounds $1$ pound

Direct labor $2$ hours $3$ hours

Product information:

Sales price $ $190$ $ $240$

Sales $($units$)12,0009,000$

Estimated beginning inventory $($units$)350160$

Desired ending inventory $($units$)300200$

Direct Materials Information

RM$1$ RM$2$ RM$3$

Cost per pound $ $4$ $ $3\mathrm{.}50$ $ $0\mathrm{.}50$

Estimated beginning inventory in pounds $2,7001,8001,500$

Desired ending inventory in pounds $4,2008001,700$

The firm expects the average wage rate to be $$30$ per hour in $2022.$ Spring Manufacturing uses direct labor hours to apply overhead. Each year the firm determines the overhead application rate for the year based on budgeted direct labor hours for the year. The firm maintains negligible Work$-$in$-$Process Inventory and expects the cost per unit for both beginning and ending inventories of finished products to be identical.

Factory Overhead Information

Indirect materials$$variable $ $11,000$

Miscellaneous supplies and tools$$variable $5,300$

Indirect labor$$variable $41,000$

Supervision$$fixed $150,000$

Payroll taxes and fringe benefits$$variable $300,000$

Maintenance costs$$fixed $16,000$

Maintenance costs$$variable $10,080$

Depreciation$$fixed $71,370$

Heat, light, and power$$fixed $43,370$

Heat, light, and power$$variable $11,000$

Total $ $659,120$

Selling and Administrative Expense Information

Advertising $ $58,000$

Sales salaries $220,000$

Travel and entertainment $64,000$

Depreciation$$warehouse $5,000$

Office salaries $63,000$

Executive salaries $230,000$

Supplies $4,100$

Depreciation$$office $6,000$

Total $ $650,100$

The effective income tax rate for the company is $30\%.$

Spring Manufacturing Company has had a continuous improvement $($kaizen$)$ program for the last two years. According to the kaizen program, the firm is expected to manufacture C$12$ and D$57$ with the following specifications:

Cost Element C$12$ D$57$

Raw material $19$ pounds $7$ pounds

Raw material $203\mathrm{.}6$ pounds

Raw material $31\mathrm{.}8$ pounds $0\mathrm{.}8$ pound

Direct labor $1\mathrm{.}5$ hours $2\mathrm{.}0$ hours

The company specifies that the variable factory overhead is to decrease by $10\%$ while the fixed factory overhead is to decrease by $5\%,$ except for depreciation expenses. The company does not expect the price of the raw materials to change. However, the hourly wage rate is likely to be $$30.$

Required:

Assume the firm can attain the expected operating level as prescribed by the kaizen program:

$1-$a$.$ Prepare the Sales budget for $2022.$

$1-$b$.$ Prepare the Production budget for $2022.$

$1-$c$.$ Prepare the Direct materials purchases budget $($units and dollars$)$ for $2022.$

$1-$d$.$ Prepare the Direct labor budget for $2022.$

$1-$e$.$ Prepare the Factory overhead budget for $2022.$

$1-$f$.$ Prepare the Cost of goods sold and ending finished goods inventory budgets for $2022.$

$1-$g$.$ Prepare the Selling and administrative expense budget for $2022.$

$1-$h$.$ Prepare the income statement, the last item of which is labeled After$-$tax Operating Income for $2022.$