Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Crane Industries had sales in 2024 of $7,752,000 and gross profit of $1,254,000. Management is considering two alternative budget plans to increase its gross profit

image text in transcribed
image text in transcribed
image text in transcribed
Crane Industries had sales in 2024 of $7,752,000 and gross profit of $1,254,000. Management is considering two alternative budget plans to increase its gross profit in 2025. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 142,500 units from its 2024 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 148,200 units. At the end of 2024. Crane has 45,600 units of inventory on hand. If Plan A is accepted, the 2025 ending inventory should be 39,900 units. If Plan B is accepted, the ending inventory should be equal to 68,400 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 2025 should be $2,134,080. Prepare a sales budget for 2025 under each plan. (Round Unit selling price answers to 2 decimal places, e.8. 52.70.) Prenare a nendurtion hudnot fore ono Compute the production cost per unit under each plan. (Round answers to 3 decimal places, e.g. 1.254.) Compute the gross profit under each plan. (Round answers to 0 decimal places, eg. 125.) Which plan should be accepted? should be accepted

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

Accounting For Managers Text And Cases

Authors: William J. Bruns

3rd Edition

0324291213, 978-0324291216

More Books

Students also viewed these Accounting questions

Question

Summarize group psychotherapy outcome research.

Answered: 1 week ago

Question

Learn about HRM development in Poland in recent years.

Answered: 1 week ago