Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2019 follow:

	Finished Components
	C12				D57
Requirements for each finished component:
RM 1		10	pounds			8	pounds
RM 2		0				4	pounds
RM 3		2	pounds			1	pound
Direct labor		2	hours			3	hours
Product information:
Sales price	$	200			$	210
Sales (units)		12,000				12,000
Estimated beginning inventory (units)		420				110
Desired ending inventory (units)		300				200

	Direct Materials Information
	RM1				RM2				RM3
Cost per pound	$	6			$	3.50			$	0.50
Estimated beginning inventory in pounds		3,200				1,200				1,300
Desired ending inventory in pounds		3,600				1,300				1,200

The firm expects the average wage rate to be $25 per hour in 2019. 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	$	12,000
Miscellaneous supplies and toolsvariable		4,500
Indirect laborvariable		45,000
Supervisionfixed		120,000
Payroll taxes and fringe benefitsvariable		210,000
Maintenance costsfixed		16,000
Maintenance costsvariable		10,090
Depreciationfixed		71,350
Heat, light, and powerfixed		43,390
Heat, light, and powervariable		15,000
Total	$	547,330

	Selling and Administrative Expense Information
Advertising	$	57,000
Sales salaries		210,000
Travel and entertainment		63,000
Depreciationwarehouse		5,000
Office salaries		59,000
Executive salaries		280,000
Supplies		4,500
Depreciationoffice		6,300
Total	$	684,800

The effective income tax rate for the company is 50%.

Required:

1. Prepare the Sales budget for 2019.

2. Prepare the Production budget for 2019.

3. Prepare the Direct materials purchases budget (units and dollars) for 2019.

4. Prepare the Direct labor budget for 2019.

5. Prepare the Factory overhead budget for 2019.

6. Prepare the Cost of goods sold and ending finished goods inventory budgets for 2019.

7. Prepare the Selling and administrative expense budget, broken down into two components: Selling Expenses, and Administrative Expenses for 2019.

8. Prepare the Budgeted income statement, the last item of which is labeled After-tax Operating Income for 2019..

.

Finished Components D57 C12 10 pounds 0 2 pounds 2 hours 8 pounds 4 pounds 1 pound 3 hours Requirements for each finished component: RM 1 RM 2 RM 3 Direct labor Product information: Sales price Sales (units) Estimated beginning inventory (units) Desired ending inventory (units) 200 12,000 420 300 S 210 12,000 110 200 S Cost per pound Estimated beginning inventory In pounds Desired ending inventory in pounds Direct Materials Information RM1 RM2 RM3 6 S 3.50 $ 0.50 3,200 1,200 1,300 3,600 1.300 1,200 The firm expects the average wage rate to be $25 per hour in 2019. 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. Indirect materials-variable Miscellaneous supplies and tools-variable Indirect labor-variable Supervision-fixed Payroll taxes and fringe benefits-variable Maintenance costs-fixed Maintenance costs-variable Depreciation fixed Heat, light, and power-lixed Heat, light, and power-variable Total Factory Overhead Information $ 12.000 4,500 45,000 120,000 210,000 16,000 10,090 71,350 43,390 15,000 $ 547,330 Advertising Sales salaries Travel and entertainment Depreciationwarehouse Office salaries Executive salaries Supplies Depreciation office Total Selling and Administrative Expense Information $ 57,000 210,000 63,000 5,000 59,000 280,000 4,500 6,300 $ 684,800 The effective income tax rate for the company is 50%