Lily Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2027. January February March April May Estimated unit sales 10,080 11,760 10,920 9.240 9,240 Unit selling price $40 $37.5 $37.5 $37.5 $37.5 Direct labor hours per unit 2.0 2.0 1.5 1.5 1.5 Direct labor cost per hour $7.0 $7.0 $7.0 $8.0 $8.0 Lily has a labor contract that calls for a wage increase to $8.0 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lily expects to begin the year with 14,784 frames 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. (a) B