Bullen & Company makes and sells high-quality glare filters for microcomputer monitors. John Crane, controller, is responsible for preparing Bullen's master budget and has assembled the following data for 2012.
The direct labour rate includes wages and all employee-related benefits and the employer's share of Canada Pension Plan (CPP) and Employment Insurance (EI). Labour-saving machinery will be fully operational by March. Also, as of March 1, the company's union contract calls for an increase in direct labour wages that is included in the direct labour rate.
Bullen expects to have 10,000 glare filters in inventory at December 31, 2011, and has a policy of carrying 50% of the following month's projected sales in inventory.

REQUIRED
A. Prepare the following budgets for Bullen & Company for the first quarter of 2012. Be sure to show supporting calculations: (1) production budget in units, (2) direct labour budget in hours, (3) direct materials budget, and (4) sales budget.
B. Calculate the total budgeted contribution margin for Bullen & Company for the first quarter of 2012. Be sure to show supporting calculations.
C. Discuss at least three behavioural considerations in the profit-planning and budgeting process.

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2012 January 20,000 February 24,000 March 16,000 75 April 18,000 Estimated unit sales Sales price per unit Direct labour hours per unit Direct labour hourly rate Direct materials cost per unit 3.5 3.5 4.0 $15 $10 4.0 15 10 16 10