Waterway Industries had sales in 2021 of $5,589,600 and gross profit of $904,200. 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 102,750 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 106,860 units. At the end of 2021, Waterway has 32,880 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 28,770 units. If Plan B is accepted, the ending inventory should be equal to 49,320 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 $1,557,690.

(a)

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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.)

WATERWAY INDUSTRIES Sales Budget choose the accounting period December 31, 2022For the Year Ending December 31, 2022For the Quarter Ending December 31, 2022
		Plan A		Plan B
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price		enter a number of units		enter a number of units
select a sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price		$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 2 decimal places
select a closing sales budget item Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price		$enter a total dollar amount		$enter a total dollar amount

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(b)

Prepare a production budget for 2022 under each plan.

WATERWAY INDUSTRIES Production Budget choose the accounting period For the Quarter Ending December 31, 2022December 31, 2022For the Year Ending December 31, 2022
		Plan A		Plan B
select an opening production budget item Total Pounds Needed for ProductionExpected Unit SalesTotal Required UnitsDesired Ending Finished Goods UnitsRequired Production UnitsTotal Materials RequiredBeginning Direct MaterialsDesired Ending Direct MaterialsBeginning Finished Goods UnitsDirect Materials per UnitDirect Materials Purchases		enter a number of units		enter a number of units
select between addition and deduction AddLess: select a production budget item Beginning Direct MaterialsDirect Materials per UnitDesired Ending Direct MaterialsBeginning Finished Goods UnitsTotal Materials RequiredDirect Materials PurchasesDesired Ending Finished Goods UnitsExpected Unit SalesRequired Production UnitsTotal Pounds Needed for ProductionTotal Required Units		enter a number of units		enter a number of units
select a summarizing line for the first part Total Required UnitsDirect Materials per UnitTotal Pounds Needed for ProductionTotal Materials RequiredBeginning Finished Goods UnitsDesired Ending Finished Goods UnitsDesired Ending Direct MaterialsBeginning Direct MaterialsExpected Unit SalesDirect Materials PurchasesRequired Production Units		enter a total amount for the first part		enter a total amount for the first part
select between addition and deduction AddLess: select a production budget item Beginning Finished Goods UnitsTotal Required UnitsDirect Materials per UnitDesired Ending Finished Goods UnitsTotal Pounds Needed for ProductionBeginning Direct MaterialsExpected Unit SalesTotal Materials RequiredDirect Materials PurchasesRequired Production UnitsDesired Ending Direct Materials		enter a number of units		enter a number of units
select a closing production budget item Expected Unit SalesTotal Pounds Needed for ProductionTotal Required UnitsDesired Ending Finished Goods UnitsDirect Materials per UnitRequired Production UnitsDirect Materials PurchasesDesired Ending Direct MaterialsBeginning Finished Goods UnitsBeginning Direct MaterialsTotal Materials Required		enter a total number of units		enter a total number of units