Required information$9-6)$PR $9-31($Algo$)$ Production and Direct$-$Labor Budgets; Activity$-$Based Overhead Budget $($LO $9-3,9-4,9-5,($The following information applies to the questions displayed below.$]$Shibby Shades Incorporated manufactures artistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company's master budget. 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 $1\mathrm{.}0$ hour to $0\mathrm{.}75$ hour.Labor$-$related costs include pension contributions of $$0\mathrm{.}80$ per hour, workers' compensation insurance of $$0\mathrm{.}50$ per hour, employee medical insurance of $$2$ per hour, and employer contributions to Social Security equal to $5\mathrm{.}00$ percent of direct$-$labor wages. The cost of employee benefits paid by the company on its employees is treated as a direct$-$labor cost.Shibby Shades Incorporated has a labor contract that calls for a wage increase to $$14\mathrm{.}00$ per hour on April $1,20$x$1.$Management expects to have $19,000$ 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.Direct$-$labor hours per unitWage per direct$-$labor hourProduction overhead:unit produced$)$JanuaryFebruaryMarchAprilMay$1\mathrm{.}01\mathrm{.}00\mathrm{.}750\mathrm{.}750\mathrm{.}75$$ $12\mathrm{.}00$$ $12\mathrm{.}00$$ $12\mathrm{.}00$$ $14\mathrm{.}00$$ $14\mathrm{.}0012,00014,00010,00011,00011,000$$ $50\mathrm{.}00$$ $47\mathrm{.}50$$ $47\mathrm{.}50$$ $47\mathrm{.}50$$ $47\mathrm{.}50$Shipping and handling $($per unit sold$)$$ $4\mathrm{.}00$$ $4\mathrm{.}00$$ $4\mathrm{.}00$$ $4\mathrm{.}00$$ $4\mathrm{.}00$Purchasing, material handling, and inspection $($per$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$Other production overhead $($per direct$-$labor hour$)$$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$$ $5\mathrm{.}00$PR $9-31($Algo$)$ Part $1$: Prepare a production budget and a direct$-$labor budget...Required:$1.$ Prepare a production budget and a direct$-$labor budget for Shibby Shades Incorporated by month and for the first quarter of $20$x$1.$