Preparation individual budgets During the first calendar quarter of 2016, Williams Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 8,000 units in the urban region at a unit price of $65 and 6,000 units in the rural region at $55 each. Because the sales manager expects the product to catch on, she has asked for production sufficient to generate a 4,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses: Variable Fixed (per unit) (total) Manufacturing costs: Direct materials A (2 lb. $2.50/lb.) $5.00 B (5 lb. $1.40/lb.) 7.00 Direct labor (2 hours per unit) 10.00 Manufacturing overhead Depreciation $22,500 Factory supplies 0.55 2,500 Supervisory salaries 16,250 Other 0.65 9,200 Operating expenses: Selling: Advertising 12,500 Sales salaries & Commissions 1.25 20,000 Other 0.50 4,200 Administrative Office salaries 15,000 Supplies 0.40 1,200