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Spring Manufacturing Company makes two components identified as C 1 2 and D 5 7 . Selected budgetary data for 2 0 2 2 follow:

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Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2022 follow: \table[[SPRING MANUFACTURING COMPANY],[Budget Income Statement],[For the Year 2022],[,,C12,,D57,,Total],[Sales,$,1,800,000,$,1,980,000,$,3,780,000],[Cost of goods sold,,,,,,0],[Gross profit,$,1,800,000,$,1,980,000,$,3,780,000],[Selling and administrative expenses,,,,,$,645,000],[Pre-tax operating income,,,,,$,3,135,000],[Income taxes],[After-tax operating income,,,,,$,3,135,000]]
Finished Components
C12 D57
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 $ 150 $ 220
Sales (units)12,0009,000
Estimated beginning inventory (units)400150
Desired ending inventory (units)300200
Direct Materials Information
RM1 RM2 RM3
Cost per pound $ 2.00 $ 2.50 $ 0.50
Estimated beginning inventory in pounds 3,0001,5001,000
Desired ending inventory in pounds 4,0001,0001,500
The firm expects the average wage rate to be $25 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 materialsvariable $ 10,000
Miscellaneous supplies and toolsvariable 5,000
Indirect laborvariable 40,000
Supervisionfixed 120,000
Payroll taxes and fringe benefitsvariable 250,000
Maintenance costsfixed 20,000
Maintenance costsvariable 10,080
Depreciationfixed 71,330
Heat, light, and powerfixed 43,420
Heat, light, and powervariable 11,000
Total $ 580,830
Selling and Administrative Expense Information
Advertising $ 60,000
Sales salaries 200,000
Travel and entertainment 60,000
Depreciationwarehouse 5,000
Office salaries 60,000
Executive salaries 250,000
Supplies 4,000
Depreciationoffice 6,000
Total $ 645,000
The effective income tax rate for the company is 40%.
Required:
1. Prepare the Sales budget for 2022.
2. Prepare the Production budget for 2022.
3. Prepare the Direct materials purchases budget (units and dollars) for 2022.
4. Prepare the Direct labor budget for 2022.
5. Prepare the Factory overhead budget for 2022.
6. Prepare the Cost of goods sold and ending finished goods inventory budgets for 2022.
7. Prepare the Selling and administrative expense budget, broken down into two components: Selling Expenses and Administrative Expenses for 2022.
8. Prepare the Budgeted income statement, the last item of which is labeled After-tax Operating Income for 2022.
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