Prepare a production budget by month and for the first quarter of the year

Donnegal Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2014. Donnegal has a labor contract that calls for a wage increase to $10 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Donnegal expects to begin the year with 16,400 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 50% of the second following month's sales. Prepare a production budget for Donnegal Company by month and for the first quarter of the year