Business, 05.05.2020 23:22 alsiedlaw

Hill Industries had sales in 2019 of $7,120,000 and gross profit of $1,121,000. Management is considering two alternative budget plans to increase its gross profit in 2020. Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by 10% from its 2019 level. Plan B would decrease the selling price per unit by $0.50. The marketing department expects that the sales volume would increase by 120,000 units. At the end of 2019, Hill has 48,000 units of inventory on hand. If Plan A is accepted, the 2020 ending inventory should be equal to 5% of the 2020 sales. If Plan B is accepted, the ending inventory should be equal to 61,000 units. Each unit produced will cost $1.80 in direct labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2020 should be $1,110,270. Prepare a sales budget for 2020 under each plan. (

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Hill Industries had sales in 2019 of $7,120,000 and gross profit of $1,121,000. Management is consid...

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