PR $9-31($Algo$)$ Production and Direct$-$Labor Budgets; Activity$-$Based Overhead Budget $($LO $9-3,9-4,9-5,9-6)$

$[$The following information applies to the questions displayed below.$]$

Shibby Shades Incorporated manufactures artistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company's master budget. In compiling the budget data for $201,$ Demarest has learned that new automated production equipment will be installed on March $1.$ This will reduce the direct labor per frame from $2\mathrm{.}0$ hours to $1\mathrm{.}75$ hours.

Labor$-$related costs include pension contributions of $$1\mathrm{.}55$ per hour, workers' compensation insurance of $$1\mathrm{.}25$ per hour, employee medical insurance of $$5$ per hour, and employer contributions to Social Security equal to $6\mathrm{.}00$ percent of directlabor wages. The cost of employee benefits paid by the company on its employees is treated as a direct$-$labor cost. Shibby Shades Incorporated has a labor contract that calls for a wage increase to $$15\mathrm{.}00$ per hour on April $1,201.$ Management expects to have $23,200$ frames on hand at December $31,200,$ and has a policy of carrying an end$-$of$-$month inventory of $100$ percent of the following month's sales plus $40$ percent of the second following month's sales.

These and other data compiled by Demarest are summarized in the following table.

$\backslash$table$[[,$January,February,March,April,May$],[$Direct$-$labor hours per unit,$2\mathrm{.}0,2\mathrm{.}0,1\mathrm{.}75,1\mathrm{.}75,1\mathrm{.}75],[$Wage per direct$-$labor hour,$$13\mathrm{.}00,$$$13\mathrm{.}00,$$

employee medical insurance of $$5$ per hour, and employer contributions to Social Security equal to $6\mathrm{.}00$ percent of directlabor wages. The cost of employee benefits paid by the company on its employees is treated as a direct$-$labor cost. Shibby Shades Incorporated has a labor contract that calls for a wage increase to $$15\mathrm{.}00$ per hour on April $1,201.$ Management expects to have $23,200$ frames on hand at December $31,200,$ and has a policy of carrying an end$-$of$-$month inventory of $100$ percent of the following month's sales plus $40$ percent of the second following month's sales.

These and other data compiled by Demarest are summarized in the following table.

$\backslash$table$[[,$January,February,March,April,May$],[$Direct$-$labor hours per unit,$2\mathrm{.}0,2\mathrm{.}0,1\mathrm{.}75,1\mathrm{.}75,1\mathrm{.}75],[$Wage per direct$-$labor hour,$$13\mathrm{.}00,$$$13\mathrm{.}00,$$$13\mathrm{.}00,$$$15\mathrm{.}00,$$$15\mathrm{.}0013\mathrm{.}00,$$$15\mathrm{.}00,$$$15\mathrm{.}00$