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.

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