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The production budget of Oriole Company calls for $81,600$ units to be produced. If it takes $48$ minutes to make one unit and the direct labor rate is $\backslash (\backslash$$ $14\backslash )$ per hour, what is the total budgeted direct labor cost? Sheffield Industries had sales in $2024$ of $\backslash$$$7,548,000$ and gross profit of $\backslash$$$1,221,000.$ Management is considering two alternative budget plans to increase its gross profit in $2025.$

Plan A would increase the unit selling price from $\backslash (\backslash$$ $8\mathrm{.}00\backslash )$ to $\backslash (\backslash$$ $8\mathrm{.}40\backslash ).$ Sales volume would decrease by $138,750$ units from its $2024$ level. Plan B would decrease the unit selling price by $\backslash (\backslash$$ $0\mathrm{.}50\backslash ).$ The marketing department expects that the sales volume would increase by $144,300$ units.

At the end of $2024,$ Sheffield has $44,400$ units of inventory on hand. If Plan A is accepted, the $2025$ ending inventory should be $38,850$ units. If Plan B is accepted, the ending inventory should be equal to $66,600$ units. Each unit produced will cost $\backslash (\backslash$$ $1\mathrm{.}50\backslash )$ in direct labor, $\backslash (\backslash$$ $1\mathrm{.}30\backslash )$ in direct materials, and $\backslash (\backslash$$ $1\mathrm{.}20\backslash )$ in variable overhead. The fixed overhead for $2025$ should be $\backslash$$$2,077,920.$ Prepare a sales budget for $2025$ under each plan. $($Round Unit selling price answers to $2$ decimal places, e$.$g$.52\mathrm{.}70.)$

SHEFFIELD INDUSTRIES

Sales Budget

For the Year Ending December $31,2025$

Plan A

Plan B

Expected Unit Sales

$\backslash (\backslash$forall $\backslash )$

$\backslash$$

$\backslash$$

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$\backslash$$ Compute the production cost per unit under each plan. $($Round answers to $3$ decimal places, e$.$g$.1\mathrm{.}254.)$

Attempts: $2$ of $3$ used Compute the gross profit under each plan. $($Round answers to $0$ decimal places, e$.$g$.125.)$

Which plan should be accepted?

should be accepted.