Problems

All applicable Problems are available in Connect.

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Spiffy Shades Corporation manufactures arlistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company's master hudget. In compiling the budget data for $20$x$1,$ Demarest has learned that new automated production equipment will be installed on March $1.$ This will reduce the direct labor per frame from $1$ hour to $\mathrm{.}75$ hour.

Labor$-$related costs include peasion contribution of $$\mathrm{.}50$ per hour, workers' compensation insurance of $$\mathrm{.}20$ per hour, employee medical insurance of $$\mathrm{.}80$ per hour, and employer contributions to Social Security equal to $7$ percent of direct$-$labor wages. The cost of employee benefis paid by the company on its employees is treated as a direct$-$labor coss$.$ Spiffy Shades Corporation has a labor contract that calls for a wage increase to $$18\mathrm{.}00$ per hour on April $1,20$x$1.$ Management expects to have $16,000$ frames on hand at December $31,20$x$0,$ and has a policy of carrying an end$-$of$-$month inventory of $100$ percent of the following month's sales plus $50$ percent of the second following month's sales.

These and other data compiled by Demarest are summarized in the following table.

$\backslash$table$[[,$January,February,March,Apeil,May$],[$Drect labar haurs per unt,$1\mathrm{.}0,10,\mathrm{.}75,\mathrm{.}75,\mathrm{.}75],[$Wsge per direct$-$laber tour $............................,$$$16\mathrm{.}00,$$$16\mathrm{.}00,$$$16\mathrm{.}00,$$$18\mathrm{.}00,$$$18\mathrm{.}00$