P1-1 Budgets in Managerial Accounting Santiago's Salsa is in the process of preparing a production cost budget for May. Actual costs in April were: Santiago's Salsa Production Cost Budget April 2011 Production - Jars of salsa $25,000 Ingredient cost (variable) $20,000 Labor cost (variable) $12,000 Rent (fixed) $5,000 Depreciation (fixed) $6,000 Other (fixed) $1,000 Total $44,000 Required: Part a: Using this information, prepare a budget for May. Assume that production will increase to 30,000 jars of salsa, reflecting an anticipated sales increase related to a new marketing campaign. Part b.1: Does the budget suggest that additional workers are needed? Suppose the wage rate is $20 per hour. How many additional labor hours are needed in May? Part b.2: What would happen if management did not anticipate the need for additional labor in May? Narrative