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	$	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 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	$	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%.

5.Prepare the Factory overhead budget for 2019.

Prepare the Factory overhead budget for 2019.

SPRING MANUFACTURING COMPANY
Factory Overhead Budget
For the Year 2019
Variable factory overhead:
Indirect materials
Miscellaneous supplies and tools
Indirect labor
Payroll taxes and fringe benefits
Maintenance costs
Heat, light, and power
		$0
Fixed factory overhead:
Supervision
Maintenance costs
Heat, light, and power
Indirect labor
Total cash fixed factory overhead	$0
		$0
Total budgeted factory overhead		$0