Dorf Inc. prepares monthly operating and financial budgets. The operating budgets for January and February are based on the following data:

	Units Produced	Units Sold
January	40,000	38,000
February	42,000	36,000

All sales are at $20 per unit. Direct materials, direct labor, and variable manufacturing overhead are estimated at $3, $2, and $1 per unit, respectively. Total fixed manufacturing overhead is budgeted at $90,000 per month. Selling and administrative expenses are budgeted at $12,000 plus 11% of sales, while federal income taxes are budgeted at 40% of income before federal income taxes. The inventory at January 1 consists of 3,000 units with a cost of $6.80 each.

a. Prepare monthly budget estimates of cost of goods sold assuming that FIFO inventory procedure is used.

b. Prepare planned operating budgets for January and February separately.