P22.3 (LO 2), E Hill Industries had sales in 2024 of $6,800,000 and gross profit of $1,100,000. 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 125,000 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 130,000 units. At the end of 2024, Hill has 40,000 units of inventory on hand. If Plan A is accepted, the 2025 ending inventory should be 35,000 units. If Plan B is aocepted, the ending imventory should be 60,000 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 2025 should be $1,895,000. Instructions a. Prepare a sales budget for 2025 under each plan. b. Prepare a production budget for 2025 under each plan. c. Compute the production cost per unit under each plan. Why is the cost per unit different for the two plans? (Round to two decimals.) c. Unit cost: Plan A $6.63 Plan B $5.90 d. Which plan should be accepted? (Hint: Compute the gross profit under each plan.) d. Gross profit: Plan A S1,283,250 Plan B S1,568,000