Question
Coronado Industries had sales in 2021 of $5,521,600 and gross profit of $893,200. Management is considering two alternative budget plans to increase its gross profit
Coronado Industries had sales in 2021 of $5,521,600 and gross profit of $893,200. 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 101,500 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 105,560 units. At the end of 2021, Coronado has 32,480 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,420 units. If Plan B is accepted, the ending inventory should be equal to 48,720 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 $1,538,740.
(a)
Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
CORONADO INDUSTRIES Sales Budget choose the accounting period For the Quarter Ending December 31, 2022December 31, 2022For the Year Ending December 31, 2022 | ||||
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Plan A | Plan B | |||
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price | enter a number of units | enter a number of units | ||
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price | $enter a dollar amount rounded to 2 decimal places | $enter a dollar amount rounded to 2 decimal places | ||
select a closing sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price | $enter a total dollar amount | $enter a total dollar amount |
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(b)
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(c1)
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(d)
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