I have provided the answers to 10-50. I need the answers to the bottom two requirements that make adjustments to the previous supplied problem. I can't figure out the bottom two, but the top information is needed to figure it out.

Spring Manufacturing Company Sales Budget 2016 C12 D57 Total Sales (in units) x Price Per Unit Total Revenue 12,000 $150 9,000 $220 21,000 7 Spring Manufacturing Company Production Budget 2016 12 D57 9,000 200 9,200 150 9,050 Sales (in units) 12,000 300 12,300 400 11,900 + Desired finished goods ending inventory Total units needed - Beginning finished goods inventory Production unit Spring Manufacturing Company Raw Materials Purchase Budget 2016 Raw Material 1 Production unit Pounds per unit RM1 needed in production (pounds) Desired ending inventory Total needed (pounds) Beginning inventory Total RM1 to purchase (pounds) Cost per pound Budgeted purchase cost of RM1 C12 D57 Total 11,900 10 1,19,000 9,050 1,91,400 4,000 1,95,400 3,000 1,92,400 72,400 $3.84.800 D57 Raw Material 2 Production unit Pounds per unit RM2 needed in production (pounds) Desired ending inventory Total RM2 needed (pounds) Beginning inventory Pounds of RM2 to purchase Cost per pound Budgeted purchase cost of RM2 12 Total 11,900 0 9,050 4 36,200 36,200 1,000 37,200 1,500 35,700 $2.50 $89,250 Raw Material 3 Production unit Pounds per unit RM3 needed in production (pounds) Desired ending inventory Total units of RM3 needed Beginning inventory Units of RM3 to purchase Cost per pound Budgeted purchase cost of RM3 C12 D57 Total 11,900 2 23,800 9,050 9,050 32,850 1,500 34,350 1,000 33,350 0.50 $16,675 Spring Manufacturing Company Direct Labor Budget 2016 12 D57 Total Budgeted production Direct labor hours per unit Total direct labor hours needed Hourly wage rate Budgeted direct labor costs 11,900 9,050 50,950 $25.00 $12,73,750 23,800 27,150 Spring Manufacturing Company Factory Overhead Budget 2016 Variable Factory Overhead: Indirect materials Miscellaneous supplies and tools Indirect labor Payroll taxes and fringe benefits Maintenance costs Heat, light, and power Total Variable Factory Overhead $10,000 $5,000 $40,000 $2,50,000 10,080 11,000 $3,26,080 Fixed Factory Overhead: Supervision Maintenance costs Heat, light, and power Total Cash Fixed Factory Overhead Depreciation Total Fixed Factory Overhead Total Budgeted Factory Overhead $1,20,000 20,000 43,420 $1,83,420 71,330 $2,54,750 $5,80,830 Spring Manufacturing Company Budgeted Cost of Goods Sold and Finished Goods Ending Inventory 2016 C12 D57 Total Sales volume Cost per unit (Schedules 1 and 2) Cost of goods sold 12,000 $93.80 $11,25,600 9,000 $135.70 $12,21,300 21,000 $23,46,900 C12 D57 Total Finished goods ending inventory Cost per unit (Schedules 1 and 2) Budgeted finished goods ending inventory $93.80 $28,140 200 $135.70 $27,140 $55,280 Schedule 1: Cost Card -Product C12 Budget Cost Per Unit Inputs Cost Element Raw material 1 Raw material 3 Direct labor Variable factory OH Fixed factory OH Cost Per Unit Unit Input Cost $2.00 $0.50 $25.00 $6.40 $5.00 uanti 10 $20.00 $1.00 50.00 $12.80 $10.00 $93.80 ($326,080/50,950) ($254,750/50,950) 2 2 Schedule 2: Cost Card-Product D57 InputsBudget Cost Cost Element Raw material 1 Raw material 2 Raw material 3 Direct labor Variable factory OH Fixed factory OH Cost Per Unit Unit Input Cost Per Unit $16.00 $10.00 $2.00 $2.50 $0.50 $25.00 $6.40 $5.00 4 $75.00 $19.20 $15.00 $135.70 ($326,080/50,950) ($254,750/50,950) Spring Manufacturing Company Selling and Administrative Expense Budget 2016 Selling Expenses: Advertising Sales salaries Travel and entertainment Depreciation Total selling expenses $60,000 $2,00,000 $60,000 $5,000 $3,25,000 Administrative expenses: Offices salaries Executive salaries Supplies Depreciation Total administrative expenses Total selling and administrative expenses $60,000 $2,50,000 $4,000 $6,000 $3,20,000 $6,45,000 Spring Manufacturing Company Budgeted Income Statement For the Year 2016 C12 D57 $19,80,000 Total $18,00,000 11,25,600 74 Sales Cost of goods sold Gross profit Selling and administrative expenses Pretax net operating income Income taxes (40%) After-tax op income $37,80,000 $23,46,900 $14,33,100 6,45,000 $7,88,100 3,15,240 $4,72,860 12,21,300 Comprehensive Profit Plan (Kaizen Budgeting) (Use information in Problem 10-50 for Spring Manufacturing Company.) 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 C12 and D57 with the following specifications: Cost Element C12 9 pounds 1.8 pounds D57 7 pounds 3.6 pounds 0.8 pounds 2 hours Raw material 1 Raw material 2 Raw material 3 Direct labor 1.5 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 1. What is the budgeted after-tax operating income if the company can attain the expected operation level as prescribed by its kaizen program? 2. What are the benefits of Spring Manufacturing Company adopting a continuous-improvement program? What are the limitations? Spring Manufacturing Company Sales Budget 2016 C12 D57 Total Sales (in units) x Price Per Unit Total Revenue 12,000 $150 9,000 $220 21,000 7 Spring Manufacturing Company Production Budget 2016 12 D57 9,000 200 9,200 150 9,050 Sales (in units) 12,000 300 12,300 400 11,900 + Desired finished goods ending inventory Total units needed - Beginning finished goods inventory Production unit Spring Manufacturing Company Raw Materials Purchase Budget 2016 Raw Material 1 Production unit Pounds per unit RM1 needed in production (pounds) Desired ending inventory Total needed (pounds) Beginning inventory Total RM1 to purchase (pounds) Cost per pound Budgeted purchase cost of RM1 C12 D57 Total 11,900 10 1,19,000 9,050 1,91,400 4,000 1,95,400 3,000 1,92,400 72,400 $3.84.800 D57 Raw Material 2 Production unit Pounds per unit RM2 needed in production (pounds) Desired ending inventory Total RM2 needed (pounds) Beginning inventory Pounds of RM2 to purchase Cost per pound Budgeted purchase cost of RM2 12 Total 11,900 0 9,050 4 36,200 36,200 1,000 37,200 1,500 35,700 $2.50 $89,250 Raw Material 3 Production unit Pounds per unit RM3 needed in production (pounds) Desired ending inventory Total units of RM3 needed Beginning inventory Units of RM3 to purchase Cost per pound Budgeted purchase cost of RM3 C12 D57 Total 11,900 2 23,800 9,050 9,050 32,850 1,500 34,350 1,000 33,350 0.50 $16,675 Spring Manufacturing Company Direct Labor Budget 2016 12 D57 Total Budgeted production Direct labor hours per unit Total direct labor hours needed Hourly wage rate Budgeted direct labor costs 11,900 9,050 50,950 $25.00 $12,73,750 23,800 27,150 Spring Manufacturing Company Factory Overhead Budget 2016 Variable Factory Overhead: Indirect materials Miscellaneous supplies and tools Indirect labor Payroll taxes and fringe benefits Maintenance costs Heat, light, and power Total Variable Factory Overhead $10,000 $5,000 $40,000 $2,50,000 10,080 11,000 $3,26,080 Fixed Factory Overhead: Supervision Maintenance costs Heat, light, and power Total Cash Fixed Factory Overhead Depreciation Total Fixed Factory Overhead Total Budgeted Factory Overhead $1,20,000 20,000 43,420 $1,83,420 71,330 $2,54,750 $5,80,830 Spring Manufacturing Company Budgeted Cost of Goods Sold and Finished Goods Ending Inventory 2016 C12 D57 Total Sales volume Cost per unit (Schedules 1 and 2) Cost of goods sold 12,000 $93.80 $11,25,600 9,000 $135.70 $12,21,300 21,000 $23,46,900 C12 D57 Total Finished goods ending inventory Cost per unit (Schedules 1 and 2) Budgeted finished goods ending inventory $93.80 $28,140 200 $135.70 $27,140 $55,280 Schedule 1: Cost Card -Product C12 Budget Cost Per Unit Inputs Cost Element Raw material 1 Raw material 3 Direct labor Variable factory OH Fixed factory OH Cost Per Unit Unit Input Cost $2.00 $0.50 $25.00 $6.40 $5.00 uanti 10 $20.00 $1.00 50.00 $12.80 $10.00 $93.80 ($326,080/50,950) ($254,750/50,950) 2 2 Schedule 2: Cost Card-Product D57 InputsBudget Cost Cost Element Raw material 1 Raw material 2 Raw material 3 Direct labor Variable factory OH Fixed factory OH Cost Per Unit Unit Input Cost Per Unit $16.00 $10.00 $2.00 $2.50 $0.50 $25.00 $6.40 $5.00 4 $75.00 $19.20 $15.00 $135.70 ($326,080/50,950) ($254,750/50,950) Spring Manufacturing Company Selling and Administrative Expense Budget 2016 Selling Expenses: Advertising Sales salaries Travel and entertainment Depreciation Total selling expenses $60,000 $2,00,000 $60,000 $5,000 $3,25,000 Administrative expenses: Offices salaries Executive salaries Supplies Depreciation Total administrative expenses Total selling and administrative expenses $60,000 $2,50,000 $4,000 $6,000 $3,20,000 $6,45,000 Spring Manufacturing Company Budgeted Income Statement For the Year 2016 C12 D57 $19,80,000 Total $18,00,000 11,25,600 74 Sales Cost of goods sold Gross profit Selling and administrative expenses Pretax net operating income Income taxes (40%) After-tax op income $37,80,000 $23,46,900 $14,33,100 6,45,000 $7,88,100 3,15,240 $4,72,860 12,21,300 Comprehensive Profit Plan (Kaizen Budgeting) (Use information in Problem 10-50 for Spring Manufacturing Company.) 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 C12 and D57 with the following specifications: Cost Element C12 9 pounds 1.8 pounds D57 7 pounds 3.6 pounds 0.8 pounds 2 hours Raw material 1 Raw material 2 Raw material 3 Direct labor 1.5 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 1. What is the budgeted after-tax operating income if the company can attain the expected operation level as prescribed by its kaizen program? 2. What are the benefits of Spring Manufacturing Company adopting a continuous-improvement program? What are the limitations