Creating inventory list to print labels

Hi everyone, this is my very first post. After a extensive search for the internet, including this forum, I have not been able to find a solution to a problem. I want to create a new worksheet that I can then use to print labels. Here is an example:

I want this to go from sheet 1:

Item Quantity
Cup 4
Dish 2
Plate 6

to sheet 2 looking like this:

Item
Cup 1 of 4
Cup 2 of 4
Cup 3 of 4
Cup 4 of 4
Dish 1 of 2
Dish 2 of 2
Plate 1 of 6
Plate 2 of 6
Plate 3 of 6
Plate 4 of 6
Plate 5 of 6
Plate 6 of 6

I am more concerned about getting the data to a new sheet based on the quantity than I am about the labels.

Thank-you bakerman2, that gave me enough to work with. Awesome quick reply too!