[The following information applies to nic www wraprayed below.] 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 $0 80 per hour, workers' compensation Insurance of $0.50 per hour, employee medical insurance of $2 per hour and employer contributions to Social Security equal to 7.00 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 $17.00 per hour on April 1, 20x1. Management expects to have 22,000 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 60 percent of the second following month's sales These and other data compiled by Demarest are summarized in the following table. January 4.0 $ 15.00 13, eee $ 60.00 February 4. $ 15.00 15, eee $ 57.50 March 3.75 $15.ee 11,800 $ 57.50 April 3.75 $ 17.00 12, eee $ 57.5e May 3.75 $ 17.ee 12, eee $ 57.58 Direct-labor hours per unit Wage per direct-labor hour Estimated unit sales Sales price per unit Production overhead: Shipping and handling (per unit sold) Purchasing, material handling, and inspection (per unit produced) Other production overhead (per direct-labor hour) $ 3.00 $ 3.80 $ 3.ee $ 3.00 $ 3.ee $ 4.00 $4.ee $ 4.00 $ 4.ee $ 4.ee $6.00 $ 6.00 $6.80 $ 6.ee $ 6.ee 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.) X Answer is not complete. SPIFFY SHADES CORPORATION Budget for Production and Direct Labor For the First Quarter of 20x1 Month January February Sales (units) 13,000 15,000 Add: Ending inventory 21,600 18,200 Total needs 34,600 33,200 Less: Beginning inventory 22,000 21,600 Units to be produced 12,600 11,600 Direct-labor hours per unit 4.00 4.00 Total hours of direct labor time needed 50,400 46,400 Direct-labor costs Wages $ 201,600 Pension contributions Workers' compensation insurance Employee medical insurance Employer's social security March 11,000 19,200 30,200 18,200 12,000 3.75 45,000 Quarter 39,000 19,200 58 200 22.000 36 200 141.900