Required information

PR $9-31($Algo$)$ Production and Direct$-$Labor Budgets; Activity$-$Based Overhead Budget $($LO $9-3,9-4,9-5,9-6)$

$[$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 $3\mathrm{.}0$ hours to $2\mathrm{.}75$ hours.

Labor$-$related costs include pension contributions of $\backslash (\backslash$$ $0\mathrm{.}55\backslash )$ per hour, workers' compensation insurance of $\backslash (\backslash$$ $0\mathrm{.}25\backslash )$ per hour, employee medical insurance of $\backslash (\backslash$$ $1\backslash )$ per hour, and employer contributions to Social Security equal to $7\mathrm{.}00$ percent of directlabor wages. The cost of employee benefits paid by the company on its employees is treated as a direct$-$labor cost. Shibby Shades Incorporated has a labor contract that calls for a wage increase to $\backslash (\backslash$$ $19\mathrm{.}00\backslash )$ per hour on April $1,20$x$1.$ Management expects to have $20,400$ 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 $40$ percent of the second following month's sales.

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

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$1.$

Note: Round "Direct$-$labor hours per unit" to $\backslash (\backslash$mathbf$\{2\}\backslash )$ decimal places.