Gonzalez, Inc., in Monterrey, Mexico, manufactures three electric gardening tools: a grass trimmer, a hedge trimmer, and a brush cutter. There are 15 skilled employees at the present time, and new employees will be engaged as production increases. Each employee works approximately 160 hours a month and is paid in Mexican pesos at the rate of M$11 per hour. They assemble and test each unit. The production plan in units is:

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March. April May June July + Grass Trimmer Hedge Trimmer Product Lines Brush Cutter 6,000 3,000 1,000 9,000 3,000 1,000 12,000 6,000 2,000 15,000 7,500 2,000 12,000 6,000 3,000 August 9,000 3,000 1,000 Labor to assemble and test: 10 minutes 15 minutes 30 minutes Required: 1. Prepare a budget of direct labor hours for each month and convert it into a budget of direct labor costs in Mexican pesos. 2. How many employees will be needed for production each month? 3. If by spending M$2,500 per month to lease a semiautomatic machine, assembly and test labor could be reduced by 20 percent. Should the change be made? Explain.