Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bonita Industries had sales in 2021 of $5,508,000 and gross profit of $891,000. Management is considering two alternative budget plans to increase its gross profit

image text in transcribed

Bonita Industries had sales in 2021 of $5,508,000 and gross profit of $891,000. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 101,250 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 105,300 units. At the end of 2021, Bonita has 32,400 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,350 units. If Plan B is accepted, the ending inventory should be equal to 48,600 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,534,950. (a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.) BONITA INDUSTRIES Sales Budget Plan A Plan B >

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Bev Vickerstaff, Parminder Johal

1st Edition

1444170414, 978-1444170412

More Books

Students also viewed these Accounting questions

Question

differentiate the function ( x + 1 ) / ( x ^ 3 + x - 6 )

Answered: 1 week ago