Exercise 23-9 (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.

Donnegal has a labor contract that calls for a wage increase to $9 per hour on april 1. New labor-saving machinery has been installed and be fully operational by march 1. Donnegal expects to begain the year with 17,600 frams on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 40% of the second following month's sales. Prepare a production budget for Donnegal Company by month and for the first quarter of the year