Exercise 21-9 (Part Level Submission) Donnegal Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2014.

		January		February		March		April		May
Estimated unit sales		10,700		11,000		8,400		8,500		8,500
Sales price per unit		$50.9		$48.4		$48.4		$48.4		$48.4
Direct labor hours per unit		2.2		2.2		1.6		1.6		1.6
Wage per direct labor hour		$9		$9		$9		$10		$10

Donnegal has a labor contract that calls for a wage increase to $10 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Donnegal expects to begin the year with 17,300 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following months sales, plus 60% of the second following months sales.

Prepare a production budget for Donnegal Company by month and for the first quarter of the year.

DONNEGAL COMPANY Production Budget For the Quarter Ending March 31, 2014 Jan Feb Mar Total

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