Answer and Explanation:
1. The preparation of direct labor budget is given below:-
Direct labor budget
Units to be produced              2,790
Hours required per unit          5
Total labor hours needed	13,950
(2,790 × 5)
Labor rate per hour                $10
Direct labor budget               $139,500
(13,950 × $10)
2. The preparation of factory overhead budget is given below:-
Total labor hours needed                 13,950
Variable overhead rate per hour       $12
Budgeted variable overheads           $167,400
(13,950 × $12)
Budgeted Fixed overheads              $580,000
Budgeted total overheads                $747,400