Blue Industries had sales in 2016 of $7,120,000 and gross profit of $1,274,000. Management is considering two alternative budget plans to increase its gross profit in 2017. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2016 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 104,000 units. At the end of 2016, Blue has 46,000 units of inventory on hand. If Plan A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales. If Plan B is accepted, the ending inventory should be equal to 67,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,947,000. Prepare a sales budget for 2017 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.) BLUE INDUSTRIES Sales Budget For the Year Ending December 31, 2017 Plan A Plan B Expected unit sales 801,000 994,000 Unit selling price 8.40 7.50 $1 $ Total sales 6,728,400 7,455,000 Your answer is correct. Prepare a production budget for 2017 under each plan. BLUE INDUSTRIES Production Budget For the Year Ending December 31, 2017 Plan A Plan B Expected Unit Sales 801,000 994,000 Add v Desired Ending Finished Goods Units v 40,050 67,000 Total Required Units 841,050 1,061,000 Less Beginning Finished Goods Units 46,000 46,000 Required Production Units 795,050 1,015,000 Compute the production cost per unit under each plan. (Round answers to 2 decimal places, e.g. 1.25.) Plan A Plan B Production cost per unit $ Plan A Plan B Gross Profit $ $ $