Question 1 of 2 Litwin Industries had sales in 2015 of $5.6 million (800000 units) and a gross profit of $1344000. Management is considering two alternative budget plans to increase its gross profit in 2016. Plan A would increase the selling price per unit from $7 to $7.60. Sales volume would decrease by 10% from its 2015 level. Plan B would decrease the selling price per unit by 5%. The marketing department expects that the sales volume would increase by 100000 units. At the end of 2015, Litwin had 70000 units on hand. If it accepts Plan A, the 2016 ending inventory should be equal to 90000 units. If it accepts Plan B, the ending inventory should be equal to 100000 units. Each unit produced will cost $2 in direct materials, $1.50 in direct labour, and $0.50 in variable overhead. The fixed overhead for 2016 should be $925000. Prepare a sales budget for 2016 under Plan A and Plan B. Use when appropriate no commas, use 2 decimal places for unit prices, zero decimal places for totals. Plan A Plan B Expected Sales Selling Price Total Sales Prepare a production budget for 2016 under Plan A and Plan B. Use where appropriate, no commas, use 2 decimal places for unit prices, zero decimal places for totals, put negative numbers and subtractions in e.g. ($45000). Plan A Plan B Expected sales Ending inventory Total required units Beginning inventory Required production