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r budget. E9-9 Rodriguez, Inc., is preparing its direct labor budget for 2017 from the following pro- duction budget based on a calendar year Quarter Units 20,000 25,000 Quarter Units 35,000 30,000 4 Each unit requires 1.5 hours of direct labor Instructions Prepare a direct labor budget for 2017. Wage rates are expected to be $16 for the first 2 quarters and $18 for quarters 3 and 4. E9-10 Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following informa- tion for 2017 ddirect January February March April May Estimated unit sales Sales price per unit Direct labor hours per unit 12,000 14,000 13,000 11,000 11,000 $50.00 $47.50 $47.50 $47.50 $47.50 1.5 2.0 1.5 Wage per direct labor hour $8.00 $8.00 $8.00 $9.00 $9.00 Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 17,600 frames on hand and has a policy of car- rying an end-of-month inventory of 100% of the following month's sales, plus 40% of the second following month's sales Instructions Prepare a production budget and a direct labor budget for Lowell Company by month and for the first quarter of the year. The direct labor budget should include direct labor hours. (CMA-Canada adapted)

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