WileyPLUSKimmel, Accounting, 7eHelp I System AnnouncementsCALCULATORPRINTER VERSIONBACKNEXTProblem 22-03A a-b, c1, dHill Industries had sales in 2019 of $7,200,000 and gross profit of $1,158,000.Management is considering two alternative budget plans to increase its grossprofit in 2020.Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volumewould decrease by 10% from its 2019 level. Plan B would decrease the sellingprice per unit by $0.50. The marketing department expects that the sales volumewould increase by 111,000 units.At the end of 2019, Hill has 40,000 units of inventory on hand. If Plan A isaccepted, the 2020 ending inventory should be equal to 5% of the 2020 sales. IfPlan B is accepted, the ending inventory should be equal to 68,000 units. Eachunit 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 $1,507,530.Prepare a sales budget for 2020 under each plan. (Round nit selling priceanswers to 2 decimal places, e.g. 52.70.)HILL INDUSTRIESSales BudgetPlan APlan BPrepare a production budget for 2020 under each plan.HILL INDUSTRIESProduction Budget CALCULATORPRINTER VERSIONBACKNEXTPrepare a production budget for 2020 under each plan.HILL INDUSTRIESProduction BudgetPlan APlan BCompute the production cost per unit under each plan. (Round answers to 2decimal places, e.g. 1.25.)Plan APlan BProduction cost per unit24Compute the gross profit under each plan.Plan APlan BGross Profit24Which plan should be accepted?should be accepted.

Sales budget is defined as the financial plan which states how the resources to be assigned in order…

Hill Industries had sales in 2019 of $7,200,000 and gross profit of $1,158,000. 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 111,000 units. At the end of 2019, Hill has 40,000 units of inventory on hand. If Plan A is

Hill Industries had sales in 2019 of $7,200,000 and gross profit of $1,158,000. 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 111,000 units. At the end of 2019, Hill has 40,000 units of inventory on hand. If Plan A is

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter8: Budgeting

Section: Chapter Questions

Problem 6PA: Budgeted income statement and balance sheet As a preliminary to requesting budget estimates of...

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