Topic 6 Question 2 b and C

Oriole Industries had sales in 2021 of $5,984,000 and gross profit of $968,000. 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 110,000 units from its 2021 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 114,400 units. At the end of 2021, Oriole has 36,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 32,000 units. If Plan B is accepted, the ending inventory should be equal to 56,000 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 $1,668,000. (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. 52.70.) ORIOLE INDUSTRIES Sales Budget For the Year Ending December 31, 2022 Plan A Plan B Expected Unit Sales 638000 862400 Unit Selling Price $ 8.4 $ 7.5 Total Sales $ 5359200 $ 6468000 (b) Your answer is correct. Prepare a production budget for 2022 under each plan. ORIOLE INDUSTRIES Production Budget For the Year Ending December 31, 2022 Plan A Plan B Expected Unit Sales 638000 862400 Add Desired Ending Finished Goods Units 32000 56000 Total Required Units 670000 918400 Less : Beginning Finished Goods Units (36000) (36000) Required Production Units 634000 882400 e Textbook and Media Attempts: 2 of 5 used (c1) X Your answer is incorrect. 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 $ 6.6 $ 5.9 e Textbook and Media Save for Later Attempts: 3 of 5 used Submit Answer (d) Your answer is partially correct. Compute the gross profit under each plan. Plan A Plan B Gross Profit $ $