CALCULATOR FULL SCREEN PRINTER VERSION BACK NEX Problem 13-3 (Part Level Submission) Bramble Industries had sales in 2016 of $6,800,000 and gross profit of $1,135,000. 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 108,000 units. At the end of 2016, Bramble has 44,000 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 62,000 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 $1,733,000. Plan A Plan B Production cost per unit BRAMBLE INDUSTRIES Production Budget For the Year Ending December 31, 2017 Plan A Plan B Expected Unit Sales 765000 958000 Add Desired Ending Finished Goods Units T 38250T 62000 Total Required Units 803250 1020000 Less Beginning Finished Goods Units 44000 44000 Required Production Units 759250 976000