Note: Income located to the products) Colt Industries had sales in 2008 of $6,400.000 and grow profit of ... Magement is considering two alternative budget plans to increase its proti Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume de crease by 5% from its 2008 level. Plan B would decrease the selling price per unit by so. The 7233A marketing department expects that the sales volume would increase by 150.08 units At the end of 2008. Colt has 40,000 units of inventory on hand. 1 Plan A is accepted the 2008 ending inventory should be equal to 5% of the 2009 sales . If Plan B is accepted the ending in en fory should be equal to 50,000 units. Each unit produced will cost $1.39 in direct labor, 52.00 in de rect materials and $1.20 in variable overhead. The fixed overhead for 2009 should be 51 895.000 Instructions (a) Prepare a sales budget for 2009 under each plan. (b) Prepare a production budget for 2009 under each plan. (c) Compute the production cost per unit under each plan. Why is the cost per unit different for each of the two plans? (Round to two decimals) (d) Which plan should be accepted? (Hint: Compute the gross profit under cach plan.) Note: Income located to the products) Colt Industries had sales in 2008 of $6,400.000 and grow profit of ... Magement is considering two alternative budget plans to increase its proti Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume de crease by 5% from its 2008 level. Plan B would decrease the selling price per unit by so. The 7233A marketing department expects that the sales volume would increase by 150.08 units At the end of 2008. Colt has 40,000 units of inventory on hand. 1 Plan A is accepted the 2008 ending inventory should be equal to 5% of the 2009 sales . If Plan B is accepted the ending in en fory should be equal to 50,000 units. Each unit produced will cost $1.39 in direct labor, 52.00 in de rect materials and $1.20 in variable overhead. The fixed overhead for 2009 should be 51 895.000 Instructions (a) Prepare a sales budget for 2009 under each plan. (b) Prepare a production budget for 2009 under each plan. (c) Compute the production cost per unit under each plan. Why is the cost per unit different for each of the two plans? (Round to two decimals) (d) Which plan should be accepted? (Hint: Compute the gross profit under cach plan.)