Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2022 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 $ 150 $ 220 Sales (units) 12,000 9,000 Estimated beginning inventory (units) 400 150 Desired ending inventory (units) 300 200 Direct Materials Information RM1 RM2 RM3 Cost per pound $ 2.00 $ 2.50 $ 0.50 Estimated beginning inventory in pounds 3,000 1,500 1,000 Desired ending inventory in pounds 4,000 1,000 1,500 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.