Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Sunland industries had sales in 2021 of $6,392,000 and gross profit of $1,034,000. Management is considering two alternative budget plans to increase its gross profit
Sunland industries had sales in 2021 of $6,392,000 and gross profit of $1,034,000. Management is considering two alternative budget plans to increase its gross profit in 2022 Plan A would increase the selling price per unit from $8.00 to $8.40, Sales volume would decrease by 117,500 units from its 2021 Ievel. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 122,200 units. At the end of 2021. Sunland has 39,000 units of inventory on hand. If Pian A is accepted, the 2022 ending inventory should be 35,000 units. If Plan B is accepted, the ending inventory should be equal to 62,000 units. Each unit produced will cost $1.50 in direct labor. $1.30 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2022 should be $1,782,000. (a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e3. 5270 ) Prepare a production budget for 2022 under each plan. Compute the production cost per unit under each plan, (Round answers to 2 decimol ploces es. 1.25) Compute the gross profit under each plan
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