Required information Problem 9-31 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 belowj Spiffy Shades Corporation manufactures artistic frames for sunglasses. Talia Demarest, controller, is responsible for preparing the company's master budget. In compiling the budget data for 20x1, Demarest has learned that new automated production equipment will be installed on March 1. This will reduce the direct labor per frame from 4.0 hours to 3.75 hours Labor-related costs include pension contributions of $1.30 per hour, workers' compensation insurance of $1.00 per hour employee medical insurance of $4 per hour, and employer contributions to Social Security equal to 700 percent of direct labor wages. The cost of employee benefits paid by the company on its employees is treated as a direct-labor cost. Spiffy Shades Corporation has a labor contract that calls for a wage increase to $1700 per hour on April 1, 20x1. Management expects to have 21,800 frames on hand at December 31, 20x0, 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 anuaryFebruary 4.0 April 3.75 March May Direct-labor hours per unit Wage per direct-labor hour Estimated unit sales Sales price per unit Production overhead 4.0 3.75 3.75 $15.00 15.0 15.00 $ 17.00 17.00 13,000 $68.00 65.50 65.50 $ 65.50 65.50 15,000 17,000 14,000 14,000 Shipping and handling (per unit sold) Purchasing, material handling, and inspection $ 3.00 3.00 3.00 $ 3.00 3.00 (per unit produced) $.4.00 $. 4.00 $ 7.00 7.00 4.00 $. 4.00 $. 4.00 7.00 $ 7.00 7.00 Other production overhead (per direct-labor hour Problem 9-31 Part 1 Required 1. Prepare a production budget and a direct-labor budget for Spiffy Shades Corporation by month and for the first quarter of 20x1 Round "Direct-labor hours per unit" to 2 decimal places.)