Lily industries had sales in $2024$ of $$7,888,000$ and gross profit of $$1,276,000.$ Management is considering two alternative budget plans to increase its gross profit in $2025.$

Plan A would increase the unit selling proce from $$8\mathrm{.}00$ to $$8\mathrm{.}40.$ Sales volume would decrease by $145,000$ units from its $2024$ level. Plan B would decrease the unit selling price by $$0\mathrm{.}50.$ The marketing department expects that the sales volume would increase by $150,800.$

Prepare a sales budget for $2025$ under each plan. Provide Expected Unit Sales, Unit Selling price and Total Sales for Plan A and Plan B$.$

At the end of $2024,$ Lily has $46,400$ units of inventory on hand. If Plan A is accepted, the $2025$ ending inventory should be $40,600$ units. If Plan B is accepted, the ending inventory should be equal to $69,600$ units. Each unit produced will cost $$1\mathrm{.}50$ in direct labor, $$1\mathrm{.}30$ in direct materials, and $$1\mathrm{.}20$ in variable overhead. The fixed overhead for $2025$ should be $$2,171,520.$

Prepare a production budget.

Compute the production cost per unit under each plan.

Compute the gross profit under each plan

Which plan should be accepted and brief explanation why.