Modesto Company makes and sells glare filters for microcomputer monitors. Chip Micro, the controller, is responsible for preparing Modesto's master budget and assembled the following data for the upcoming year. The direct materials cost per unit was $10 in December of the current year. Labor saving machinery will be operational by March of the upcoming year. Also, as of March 1, the company plans to increase its direct labor rate. Direct labor for Modesto is considered variable because the company can call in its workers when needed and send them home when not needed. Modesto expects to have 9,000 filters in inventory on December 31 of the current year, and has a policy of carrying 25 percent of the following month's projected sales in inventory. Information for the first four months of the upcoming year is as follows:

	January	February	March	April
Estimated unit sales	36,000	34,500	39,000	38,600
Sales price per unit	$80	$80	$75	$75
Direct labor hours per unit	1.0	1.0	0.75	0.75
Direct labor rate per hour	$27	$27	$30	$30
Direct materials cost per unit	$10	$10	$10	$10

Requirements:

1. Prepare the following budgets for Modesto Company for each month in the first quarter (January, February, and March) and for the entire first quarter of the upcoming year. Show supporting calculations.

1. Production budget
2. Direct labor cost budget
3. Direct materials usage budget in dollars
4. Sales revenue budget

1. Calculate the total budgeted contribution margin for Modesto by month (months of January, February, and March) and in total for the first quarter of the upcoming year. Show supporting computations.