Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Oriole Industries had sales in 2021 of $7,480,000 and gross profit of $1,210,000. Management is considering two alternative budget plans to increase its gross profit

Oriole Industries had sales in 2021 of $7,480,000 and gross profit of $1,210,000. 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 137,500 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 143,000 units.

At the end of 2021, Oriole has 47,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 43,000 units. If Plan B is accepted, the ending inventory should be equal to 78,000 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 $2,086,000.

image text in transcribed

image text in transcribed

image text in transcribed

image text in transcribed

(a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.) ORIOLE INDUSTRIES Sales Budget Plan A Plan B

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

Financial And Managerial Accounting

Authors: Jerry J Weygandt, Paul D Kimmel, Jill E Mitchell

4th Edition

1119752620, 978-1119752622

More Books

Students also viewed these Accounting questions

Question

What risks do you feel P&G will face going forward?

Answered: 1 week ago