Vaughn Industries had sales in 2021 of $5,739,200 and gross profit of $928,400. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 105,500 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 109,720 units. At the end of 2021, Vaughn has 33,760 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 29,540 units. If Plan B is accepted, the ending inventory should be equal to 50,640 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,599,380.

Vaughn Industries had sales in 2021 of $5,739,200 and gross profit of $928,400. Management is considering two alternative budget plans to increase its gross profit in 2022. Plan A would increase the unit selling price from $8.00 to $8.40. Sales volume would decrease by 105,500 units from its 2021 level. Plan B would decrease the unit selling price by $0.50. The marketing department expects that the sales volume would increase by 109,720 units. At the end of 2021, Vaughn has 33,760 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 29,540 units. If Plan B is accepted, the ending inventory should be equal to 50,640 units. Each unit produced will cost $1.5 in direct labor, $1.3 in direct materials, and $1.2 in variable overhead. The fixed overhead for 2022 should be $1,599,380. Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.) VAUGHN INDUSTRIES Sales Budget Plan A Plan B $ $ $ $ ta Prepare a production budget for 2022 under each plan. VAUGHN INDUSTRIES Production Budget Plan A Plan B 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 $ $ Compute the gross profit under each plan. (Round answers to 0 decimal places, e.g. 125.) Plan A Plan B Gross Profit $ $ Which plan should be accepted? A should be accepted