List of accounts

(a) Direct Labor

Direct Materials

Expected Unit Sales

Production Units

Total Sales

Unit Selling price

list of accounts

(b) Beginning Finished Goods Units

Total Required Units

Desired Ending Finished Goods Units

Total Pounds Needed for Production

Direct Materials per Unit

Beginning Direct Materials

Expected Unit Sales

Required Production Units

Desired Ending Direct Materials

Total Materials Required

Direct Materials Purchases

Vaughn Industries had sales in 2021 of $5,739,200 and gross profit of $928,400. 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 105.500 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 109.720 units. At the end of 2021, Vaughn has 33,760 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 29,540 units. If Plan B is accepted, the ending inventory should be equal to 50,640 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 $1,599,380. (a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, eg. 52.70. ) Prepare a production budget for 2022 under each plan. Compute the gross profit under each plan. (Round answers to 0 decimal places, e.g. 125.) Which plan should be accepted