Problem 24-03A a-b, c1, d (Part Level Submission) (Video)

Hill Industries had sales in 2019 of $6,800,000 and gross profit of $1,100,000. Management is considering two alternative budget plans to increase its gross profit in 2020. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2019 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 100,000 units. At the end of 2019, Hill has 40,000 units of inventory on hand. If Plan A is accepted, the 2020 ending inventory should be equal to 5% of the 2020 sales. If Plan B is accepted, the ending inventory should be equal to 60,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2020 should be $1,007,490.

(a) Your answer is correct. Prepare a sales budget for 2020 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.) HILL INDUSTRIES Sales Budget For the Year Ending December 31, 2020 Plan A Plan B Expected Unit Sales 765000 950000 Unit Selling Price POP Total Sales $6426000 $(7125000 (b) Your answer is correct. Prepare a production budget for 2020 under each plan. HILL INDUSTRIES Production Budget For the Year Ending December 31, 2020 Plan A Plan B Expected Unit Sales 765000 950000 Desired Ending Finished Goods Units o Total Required Units Less 9). Beginning Finished Goods Units 803250 40000 | 763250 FOOOO 1010000 40000 970000 Required Production Units (c1) x Your answer is incorrect. Try again. 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 6.88] 6.35]