Question: i need a production budget, cost per under each plan, and compute the gross unit under each plan Sandhill Industries had sales in 2021 of
Sandhill Industries had sales in 2021 of $8,160,000 and gross profit of $1,320,000. 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 150,000 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 156,000 units. At the end of 2021, Sandhill has 52,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 48,000 units. If Plan B is accepted, the ending inventory should be equal to 88,000 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 $2,276,000. (a) Your answer is correct
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