Prepare production and direct labour budgets. 13P10.54B (LO 2, 3) Raddington Inc. makes and sells chairs. The controller is responsible for preparing the master budget and has accumulated the following information for 2022: January February March April May 15,000 18,000 13,000 14,000 14,000 $85 $75 $75 $75 $75 2 2 1.5 1.5 1.5 $18 $18 $18 $20 $20 Estimated unit sales Sales price per unit Direct labour hours per unit Wage per direct labour hour Raddington Inc. has a labour contract that calls for a wage increase to $20 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Raddington Inc. expects to begin the year with 24,000 chairs 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 next month's sales. Instructions a. Prepare a production budget and a direct labour budget for Raddington Inc. by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. a. Production for February: 13,500 units; direct labour total: $1,422,000 b. For each item used in Raddington Inc.'s production budget and its direct labour budget, identify the other component(s) of the master budget (budget package) that would also use these data.

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It…

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future…