Crane Industries had sales in 2021 of $8,568,000 and gross profit of $1,386,000. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 157,500 units from its 2021 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 163,800 units. At the end of 2021, Crane has 55,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 51,000 units. If Plan B is accepted, the ending inventory should be equal to 94,000 units. Each unit produced will cost $1.50 in direct labor, $1.30 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2022 should be $2,390,000.

(a)

Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)

CRANE INDUSTRIES Sales Budget choose the accounting period For the Year Ending December 31, 2022For the Quarter Ending December 31, 2022December 31, 2022
		Plan A		Plan B
select an opening 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		$enter a dollar amount
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)

Prepare a production budget for 2022 under each plan.

CRANE INDUSTRIES Production Budget choose the accounting period December 31, 2022For the Quarter Ending December 31, 2022For the Year Ending December 31, 2022
		Plan A		Plan B
select an opening production budget item Total Materials RequiredDirect Materials PurchasesBeginning Direct MaterialsExpected Unit SalesBeginning Finished Goods UnitsTotal Pounds Needed for ProductionTotal Required UnitsDesired Ending Direct MaterialsDirect Materials per UnitDesired Ending Finished Goods UnitsRequired Production Units		enter a number of units		enter a number of units
select between addition and deduction AddLess: select a production budget item Desired Ending Finished Goods UnitsTotal Materials RequiredBeginning Direct MaterialsTotal Required UnitsTotal Pounds Needed for ProductionExpected Unit SalesDirect Materials PurchasesRequired Production UnitsDesired Ending Direct MaterialsDirect Materials per UnitBeginning Finished Goods Units		enter a number of units		enter a number of units
select a summarizing line for the first part Desired Ending Finished Goods UnitsTotal Materials RequiredDirect Materials per UnitTotal Required UnitsExpected Unit SalesTotal Pounds Needed for ProductionDirect Materials PurchasesBeginning Finished Goods UnitsDesired Ending Direct MaterialsBeginning Direct MaterialsRequired Production Units		enter a total number of units for the first part		enter a total number of units for the first part
select between addition and deduction AddLess: select a production budget item Beginning Finished Goods UnitsBeginning Direct MaterialsExpected Unit SalesTotal Pounds Needed for ProductionDesired Ending Finished Goods UnitsTotal Required UnitsDirect Materials per UnitDesired Ending Direct MaterialsTotal Materials RequiredRequired Production UnitsDirect Materials Purchases		enter a number of units		enter a number of units
select a closing production budget item Desired Ending Direct MaterialsTotal Pounds Needed for ProductionExpected Unit SalesRequired Production UnitsDesired Ending Finished Goods UnitsDirect Materials per UnitDirect Materials PurchasesBeginning Direct MaterialsTotal Required UnitsTotal Materials RequiredBeginning Finished Goods Units		enter a total number of units		enter a total number of units

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(c1)

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		$enter production cost per unit in dollars rounded to 2 decimal places		$enter production cost per unit in dollars rounded to 2 decimal places

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(d)

Compute the gross profit under each plan.

		Plan A		Plan B
Gross Profit		$enter gross profit in dollars		$enter gross profit in dollars

Which plan should be accepted?

select a plan Plan APlan B should be accepted.