Aaron Furniture builds high-end hand-made dining tables. Attacus Simmons, the company's owner, has developed the following sales forecast for 2018.

Because of the time needed to create each table, Aaron maintains an ending Finished Goods Inventory of 20% of the following quarter's budgeted sales. Aaron has been following this inventory policy for several years. The company ended 2017 with 500 tables on hand. The standard cost card for a table is as follows:

Required
a. Prepare Aaron's production budget for 2018. Assume that the desired ending inventory for 2018 is 600 tables.
b. Aaron maintains inventory of American cherry wood equal to 10% of the following quarter's production needs. On December 31, 2017, Aaron's physical inventory count showed 5,500 board feet of American cherry. Due to an anticipated price increase in 2019, managers want to have 10,000 board feet of American cherry wood in inventory on December 31, 2018. Prepare Aaron's 2018 direct materials purchases budget for American cherry wood.
c. Prepare Aaron's direct labor budget for 2018.
d. Assume that because of the skill level required to make the tables, Aaron cannot easily hire additional workers to handle peaks in demand. Consequently, the company maintains a steady workforce of 60 employees and guarantees each worker 500 hours per quarter. For any additional time required to complete the scheduled production, these same workers earn 1.5 times their normal hourly rate. Prepare Aaron's direct labor budget for 2018.

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1st Quarter 2,500 2nd Quarter 2,700 3rd Quarter 4th Quarter Forecasted sales (tables) 2,900 2,200 Standard Price Total Standard Cost American cherry wood American cherry turning 25 board feet $5/board foot S 125 square (legs) Direct labor Variable overhead Fixed overhead 4 squares 12 DLH 12 DLH 12 DLH $ 10/square $18/DLH S 60/DLH $ 10VDLH 40 216 720 120 $1,221