Sunland Industries had sales in $2024$ of $$7,344,000$ and gross profit of $$1,188,000.$ Management is considering two alternative budget plans to increase its gross profit in $2025.$

Plan A would increase the unit selling price from $$8\mathrm{.}00$ to $$8\mathrm{.}40.$ Sales volume would decrease by $135,000$ units from its $2024$ level. Plan B would decrease the unit selling price by $$0\mathrm{.}50.$ The marketing department expects that the sales volume would increase by $140,400$ units.

At the end of $2024,$ Sunland has $43,200$ units of inventory on hand. If Plan A is accepted, the $2025$ ending inventory should be $37,800$ units. If Plan B is accepted, the ending inventory should be equal to $64,800$ units. Each unit produced will cost $$1\mathrm{.}50$ in direct labor, $$1\mathrm{.}30$ in direct materials, and $$1\mathrm{.}20$ in variable overhead. The fixed overhead for $2025$ should be $$2,021,760.$

Compute the production cost per unit under each plan. $($Round answers to $3$ decimal places, e$.$g$.1\mathrm{.}254.)$

Plan A

Plan B

Production cost per unit

$

$

eTextbook and Media

$$

Your answer is incorrect.

Compute the gross profit under each plan. $($Round answers to $0$ decimal places, e$.$g$.125.)$

$\backslash$table$[[,$Plan A$,,$Plan B$],[$Gross Profit $$,$$$,,]]$

Which plan should be accepted?

$$ should be accepted.