$1.$Prepare a production budget and a direct manufacturing labor cost budget for MahoneyMahoney Company by month and for the first quarter of $20182018.$ You may combine both budgets in one schedule. The direct manufacturing labor cost budget should include$$ labor$-$hours and show the details for each labor cost category.More info

In addition to wages, direct manufacturing labor$-$related costs include pension

contributions of $$0\mathrm{.}50$ per hour, worker's compensation insurance of $$0\mathrm{.}20$

per hour, employee medical insurance of $$0\mathrm{.}30$ per hour, and Social Security

taxes. Assume that as of January $1,2018,$ the Social Security tax rates are $7\mathrm{.}5\%$

for employers and $7\mathrm{.}5\%$ for employees. The cost of employee benefits paid by

Mahoney on its direct manufacturing employees is treated as a direct

manufacturing labor cost.

Mahoney has a labor contract that calls for a wage increase to $$12$ per hour on

April $1,2018.$ New labor$-$saving machinery has been installed and will be fully

operational by March $1,2018.$ Mahoney expects to have $21,500$ frames on hand at

December $31,2017,$ and it has a policy of carrying an end$-$of$-$month inventory

of $100\%$ of the following month's sales plus $50\%$ of the second following month's

sales.

$2.$What actions has the budget process prompted MahoneyMahoney$\text{'}$s management to$$ take?

$3.$How might MahoneyMahoney$\text{'}$s managers use the budget developed in requirement $1$ to better manage the$$ company?