Sheffield Industries had sales in $2021$ of $$8,432,000$ and gross profit of $$1,364,000.$ Management is considering two alternative

budget plans to increase its gross profit in $2022.$

Plan A would increase the unit selling price from $$8$ to $$8\mathrm{.}4.$ Sales volume would decrease by $139,000$ units from its $2021$ level. Plan B

would decrease the unit selling price by $$0\mathrm{.}5.$ The marketing department expects that the sales volume would increase by $144,000$ units.

At the end of $2021,$ Sheffield has $50,000$ units of inventory on hand. If Plan A is accepted, the $2022$ ending inventory should be $44,000$

units. If Plan $B$ is accepted, the ending inventory should be $39,000$ units. Each unit produced will cost $$1\mathrm{.}50$ in direct labor,

$$1\mathrm{.}30$ in Direct mayerials, and $$1\mathrm{.}20$ in variable overhead. The fixed overhead for $2022$ should be $$1,920,000$

$($a$)$

Your answer is correct.

Prepare a sales budget for $2022$ under each plan. $($Round Unit selling price answers to $2$ decimal places, e$.$g$.52\mathrm{.}70.)$

SHEFFIELD INDUSTRIES

Sales Budget

For the Year Ending December $31,2022$

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$($b$)$

Prepare a production budget for $2022$ under each plan.

SHEFFIELD INDUSTRIES

Production Budget

For the Year Ending December $31,2022$

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