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.

Prepare the Sales budget for 2019. SPRING MANUFACTURING COMPANY Sales Budget For the Year 2019 C12 D57 12,000 12,000 200 $ 210 $ 2,400,000 $ 2,520,000 $ Total Sales (in units) Selling price per unit Total sales revenue $ 4,920,000 Prepare the Production budget for 2019. D57 SPRING MANUFACTURING COMPANY Production Budget For the Year 2019 C12 Budgeted sales in units) 12,000 Add: Desired finished goods ending inventory 300 Total units needed 12,300 Less: Beginning finished goods inventory 420 Budgeted production (in units) 11,880 12,000 200 12,200 110 12,090 Prepare the Direct materials purchases budget (units and dollars) for 2019. (Round "Cost per pound" to 2 decimal places.) SPRING MANUFACTURING COMPANY Direct Materials Purchases Budget (units and dollars) For the Year 2019 C12 D57 Raw material (RM) 1: Budgeted production Total RM 1 needed for production 0 0 0 Total RM 1 needed (lbs.) 0 Required purchases of RM 1 (lbs.) 0 Budgeted purchases, RM 1 $ 0 Raw material (RM) 2: Budgeted production Prepare the Direct labor budget for 2019. D57 Total SPRING MANUFACTURING COMPANY Direct Labor Budget For the Year 2019 C12 Budgeted production 11,880 Direct labor hours per unit 2 Total direct labor hours needed 23,760 Hourly wage rate Budgeted direct labor costs 12,090 3 36,270 $ $ 60,030 25 1,500,750 Prepare the Factory overhead budget for 2019. SPRING MANUFACTURING COMPANY Factory Overhead Budget For the Year 2019 Variable factory overhead: Indirect materials $ 12,000 Indirect labor 45,000 Payroll taxes and fringe benefits 210,000 Maintenance costs 10,000 Heat, light, and power 15,000 Miscellaneous supplies and tools 4,500 $ 296,500 $ $ Fixed factory overhead: Supervision Maintenance costs Depreciation Heat, light, and power Total cash fixed factory overhead 120,000 16,000 71,350 43,390 250,740 $ Prepare the Cost of goods sold and ending finished goods inventory budgets for 2019. (Round your int to 2 decimal places.) SPRING MANUFACTURING COMPANY Ending Finished Goods Inventory and Budgeted CGS For the Year 2019 C12 D57 Sales volume 12,000 12,000 Cost per unit Cost of goods sold 0 $ 0 $ Total 24,000 $ 0 300 200 Ending finished goods inventory Cost per unit Budgeted ending inventories $ 0 $ 0 $ 0 Prepare the Selling and administrative expense budget, broken down into two components: Selling Expenses, and Administrative Expenses for 2019. SPRING MANUFACTURING COMPANY Selling and Administrative Expense Budget For the Year 2019 $ Selling expenses Advertising Sales salaries Travel and entertainment 57,000 210,000 63,000 $ 330,000 $ 5,000 6,300 Administrative expenses: Depreciationwarehouse Depreciation office Office salaries Executive salaries Supplies Total selling and administrative expenses 59,000 280,000 4,500 $ 354,800 684,800 $ Prepare the Budgeted income statement, the last item of which is labeled After-tax Operating Income for 2019. (Round your intermediate calculations to 2 decimal places.) SPRING MANUFACTURING COMPANY Budget Income Statement For the Year 2019 C12 D57 Total $ 2,400,000 $ 2,520,000 S 4,920,000 0 $ 2,400,000 $ 2,520,000 $ 4,920,000 Sales Cost of goods sold Gross profit Selling and administrative expenses Pre-tax operating income Income taxes After-tax operating income $ 4,920,000 S 4,920,000