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 $ 160 $ 180 Sales (units) 12,000 10,000 Estimated beginning inventory (units) 410 110 Desired ending inventory (units) 300 200 Direct Materials Information RM1 RM2 RM3 Cost per pound $ 2 $ 2.50 $ 0.50 Estimated beginning inventory in pounds 2,900 1,400 700 Desired ending inventory in pounds 3,900 1,500 1,800 The firm expects the average wage rate to be $30 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 4,500 Indirect laborvariable 45,000 Supervisionfixed 170,000 Payroll taxes and fringe benefitsvariable 200,000 Maintenance costsfixed 25,000 Maintenance costsvariable 10,130 Depreciationfixed 71,330 Heat, light, and powerfixed 43,470 Heat, light, and powervariable 10,000 Total $ 589,430 Selling and Administrative Expense Information Advertising $ 63,000 Sales salaries 160,000 Travel and entertainment 63,000 Depreciationwarehouse 5,000 Office salaries 61,000 Executive salaries 260,000 Supplies 4,000 Depreciationoffice 5,900 Total $ 621,900 The effective income tax rate for the company is 50%. Spring Manufacturing Company has had a continuous improvement (kaizen) program for the last two years. According to the kaizen program, the firm is expected to manufacture C12 and D57 with the following specifications: Cost Element C12 D57 Raw material 1 9 lbs. 7 lbs. Raw material 2 0 3.6 lbs. Raw material 3 1.8 lbs. 0.8 lb. Direct labor 1.5 hrs. 2.0 hrs. The company specifies that the variable factory overhead is to decrease by 10% while the fixed factory overhead is to decrease by 5%, except for depreciation expenses. The company does not expect the price of the raw materials to change. However, the hourly wage rate is likely to be $30. Required: Assume the firm can attain the expected operating level as prescribed by the kaizen program: 1-a. Prepare the Sales budget for 2019. 1-b. Prepare the Production budget for 2019. 1-c. Prepare the Direct materials purchases budget (units and dollars) for 2019. 1-d. Prepare the Direct labor budget for 2019. 1-e. Prepare the Factory overhead budget for 2019. 1-f. Prepare the Cost of goods sold and ending finished goods inventory budgets for 2019. 1-g. Prepare the Selling and administrative expense budget for 2019. 1-h. Prepare the income statement, the last item of which is labeled After-tax Operating Income for 2019.