Lily Industries had sales in 2021 of $5,467,200 and gross profit of $884,400. 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 100,500 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 104,520 units. At the end of 2021, Lily has 32,160 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,140units. If Plan B is accepted, the ending inventory should be equal to 48,240 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 $1,523,580.

(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 a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 2 decimal places

(d)

Compute the gross profit under each plan. (Round answers to 0 decimal places, e.g. 125.)

		Plan A		Plan B
Gross Profit		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 0 decimal places

Which plan should be accepted?

select the plan Plan APlan B should be accepted.