Prepare selected quarterly operating budgets.

P$6\mathrm{.}1($L$01,2,3),$ AP Excel Harmony's sling$-$bag company is now in its sixth year of operations. She credits much of her success to her hard$-$working great$-$aunt, who taught Harmony the value of planning. Harmony realizes she can't plan for every scenario, but she can plan for the most likely ones. This mindset is essential to Harmony when it is time to budget for her business. She gathers the most likely sales volumes and resource usages for the upcoming period as follows.

Budgeted sales volume $\frac{\text{J}\text{a}\text{n}\text{u}\text{a}\text{r}\text{y}}{15,000}\frac{\text{F}\text{e}\text{b}\text{r}\text{u}\text{a}\text{r}\text{y}}{14,000}\frac{\text{M}\text{a}\text{r}\text{c}\text{h}}{13,000}\frac{\text{A}\text{p}\text{r}\text{i}\text{l}}{16,000}\frac{\text{M}\text{a}\text{y}}{18,000}\frac{\text{J}\text{u}\text{n}\text{e}}{20,000}$

$\backslash$table$[[$Budgeted Resource Usage for One Unit,,Budgeted Resource Costs$],[$DM: $0\mathrm{.}3$ square yards of fabric,$$3$ per square yard,$],[$DM: $1$ linear yard of lightweight rope,$$0\mathrm{.}50$ per linear yard,$],[$DL: $6$ minutes of direct labor time,$$13$ per DL hour,$],[$Variable$-$MOH: $6$ minutes of machine time,$$8$ per machine hour,$]]$

Additional information:

Budgeted selling price per unit: $$10.$

Target ending FG inventory of sling bags: $15\%$ of following month's sales volume.

Target ending DM inventory of fabric: $20\%$ of following month's production needs.

Target ending DM inventory of rope: $40\%$ of following month's production needs.

Budgeted fixed$-$MOH costs: supervisor salaries of $$3,000$ per month, depreciation on plant assets of $$2,500$ per month, property taxes and insurance of $$1,200$ per month.

Required

a$.$ Prepare the following monthly budgets for the upcoming first quarter for Harmony's sling$-$bag business $($present quarter totals for each budget, as well$).$

Sales forecast.

Production budget.

DM purchases budget for $($i$)$ fabric and $($ii$)$ rope.

DL budget.

MOH budget.

b$.$ Explain how using the most realistic information possible in Harmony's budgets might affect her employees' motivation in meeting the budget $($for sales$)$ and in not exceeding the budgets $($in the production areas included above$).$

c$.$ Explain what other approaches Harmony might use to help generate more buy$-$in for these budgets.