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Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2022 follow: The firm expects the average wage rate to
Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2022 follow: The firm expects the average wage rate to be $30 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. The effective income tax rate for the company is 30%. 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: 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. SPRING MANUFACTURING COMPANY Selling and Administrative Expense Budget For the Year 2022 Selling expenses: \begin{tabular}{|l|l|l|} \hline & & \\ \hline & & \\ \hline & & \\ \hline & & $ \\ \hline Administrative expenses: & & \\ \hline & & \\ \hline & & \\ \hline & & \\ \hline & & $ \\ \hline Total selling and administrative expenses & & \\ \hline \end{tabular}
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