Donnegal Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2014.

Donnegal has a labor contract that calls for a wage increase to $9.00 per hour on April 1.
New labor-saving machinery has been installed and will be fully operational by March 1.
Donnegal expects to begin the year with 17,600 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month€™s sales, plus 40% of the second following month€™s sales.

Instructions
Prepare a production budget and a direct labor budget for Donnegal Company by month and for the first quarter of the year. The direct labor budget should include direct laborhours.

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January Fbruary March April May Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour 12,000 14,000 10,000 11,000 11,000 $50.00 $47.50 $47.50 $47.50 $47.50 1.5 $8.00 $8.00 $9.00 $9.00 1.5 1.5 2.0 $8.00 2.0