Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please answer all parts of this question Pharoah Industries had sales in 2021 of $5,624,000 and gress profit of $1,094,000. Management is considering two alternative
Please answer all parts of this question
Pharoah Industries had sales in 2021 of $5,624,000 and gress profit of $1,094,000. Management is considering two alternative budget plans to increase its gross proft in 2022 Plan A would increase the selling price per unit from $8.00 to 88.40. 5ales volume would decrease by 10% from its 2021 leveL. Plan 8 would decrease the selling price per unit by 50.50. The marketing department expects that the sales volume would increase by 99.000 units At the end of 2021. Pharoah has 39,000 units of inventory on hand. If Plan A s accepted, the 2022 ending inventory should be equal to 5% of the 2022 sales. If Plan B is accepted, the ending imventory should be equal to 59,000 units. Each unit produced will cost $1.90 in direct labour, $1.40 in direct materials, and $130 in variable overhead. The foced overhead for 2022 should be $1,889,000. Prepare a sales budget for 2022 under each plan. (Round the selling prlce per unt to 2 decimal ploces, eg. 15.25.) Prepare a production budget for 2022 under each pian. Calculate the production cost per unit under each plan. (Round answers to 2 declmal ploces, eg 15. 25.) phacm, es 135.) Wrich phan thould be accepted Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started