Budgets for production and direct manufacturing labour

The All Frame Company makes and sells artistic frames for pictures of wedding, graduations, and other special events. Martin Flack, the company controller, is responsible for preparing the master budget and has accumulated the following information for the year.

	2022
	January	February	March	April	May
Estimated sales in units	10,000	12,000	8,000	9,000	9,000
Selling price	$54.00	$51.50	$51.50	$51.50	$51.50
Direct manufacturing labour-hours per unit	2.0	2.0	1.5	1.5	1.5
Wage per direct manufacturing labour-hour	$10.00	$10.00	$10.00	$11.00	$11.00

Direct manufacturing labour-related costs include pension contributions of $0.50 per hour, workers compensation insurance of $0.15 per hour, employee medical insurance of $0.40 per hour, and employment insurance, in addition to wages. Assume that as of January 1, 2022, the employment insurance rates are 7.5% of wages for employees. The cost of employee benefits paid by All Frame for its employees is treated as a direct manufacturing labour cost.

All Frame has as employee labour contract that calls for a wage increase to $11 per hour on April 1, 2022. New labour-saving machinery has been installed and will be fully operational by March 1, 2022.

The controller has been informed that the company expects to have 16,000 frames on hand on December 31, 2021, and has a policy of carrying an end-of-month inventory of 100% of the following months sales plus 50% of the second following month's sales.

Required:

Prepare a production budget and a direct manufacturing labour budget for All Frame Company by month and for the first quarter for each labour cost category.