January February March April May 7200 8,00 8,00 Estimated sales in units 10,000 14,000 0 0 0 $ $ 5 Selling price $ 54.00 $ 50.50 50.50 50.50 50.50 Direct manufacturing laborhour per unit 2.00 2.00 1.50 1.50 1.50 $ $ $ Wage per direct manufacturing laborhour $ 12.00 $ 12.00 12.00 13.00 13.00 In addition to wages, direct manufacturing laborrelated costs include pension contribution of $0.50 per hour, worker's compensation insurance of $0.20 per hour. employee medical insurance of $0.30 per hour, and Social Security taxes. Assume that the cost of employee benets paid by Roletter on its employees is treated as a direct manufacturing labor cost. Roletter has a labor contract that calls for a wage increase to $13 per hour on April, 2015. New laborsaving machinery has been installed and will be fully operational by March 1, 2015. Roletter expects to have 1?,500 frames on hand at December 31, 2014, and it has a policy of carrying an endofmonth inventory of 100% of the following month's sates plus 50% of the second following month's sales. 1. Prepare a production budget and a direct manufacturing labor budget for Roletter Company by month and for the rst quarter of 2015. You may combine both budgets in one schedule. The direct manufacturing labor budget should include laborhours and show the details for each labor cost category. 2. What action has the budget process prompted Roletter's management to take? 3. How might Roletter's managers use the budget developed in requirement 1 to better manage the company