Babcock Builders is a well-regarded construction company that serves as a general contractor for both residential and commercial construction projects. One of the company€™s signature features is its cabinetry. The company€™s founder and president, Bill Babcock, began manufacturing cabinets six years ago in an effort to capitalize on the company€™s reputation and the skills of its craftsmen. The company€™s production budget for the first seven months of 2010 is shown below:

Babcock€™s most popular cabinet is a small cherry wood cabinet typically used in bathrooms. Each completed unit requires 3.5 hours of direct labor, and the skilled labor costs an average of $25 per hour. The company applies overhead at the rate of $3 per direct labor hour.

Required
A. Prepare a direct labor budget for January through June.
B. Prepare a manufacturing overhead budget for the sameperiod.

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Month January February March April Units 10,000 17,000 13,000 18,500 Month Units 22,100 24,300 26,200 ay June July