Please do part B Problern 21-3A (Part Level Submission) Hill Industries had sale

Question

Please do part B

Problern 21-3A (Part Level Submission) Hill Industries had sales in 2016 of $7,520,000 and gress profit of $1,204,000. Management is considering two aternative budget plans to increase its gross profit in 2017. Plan A would increase the selling price per un from $8.00 to $8.40. Sales volume ould decrease br 10% from its 2016 le el Pla B o d decrease the selling price per unit by $0.50. The marketing department expects that the sales volume w ould increase by 117,000 uni At the end of 2016, Hill has 42,000 units of inventory on hend. If P en A is accepted, the 2017 ending inventory should be equal to 5% of the 2017 sales r Plan B is accepted the ending inventory should be equal to 71,000 units. Each unit produced wil cost $1.30 in d ect labor, $1.40 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2017 should be $1,649,000. ??) Your answer is corract. Prepare a sales budget for 2017 under each plan. (Round Unit selling price answers to 2 dacinal places, e.g. 52.70 Sales Budiget Plan B Expected unit s 4000 10570 Unit selling price 8.40 0 Total seles #7106400 sr79275001 Attempts: 1 of 3 used Prepere a production budget or 2017 under each plen. HILL INDUSTRIES Attempts: 0 of 3 used

Explanation / Answer

Production budget :

Plan A Plan B Sales units 846000 1057000 Add: Desired ending inventory 42300 71000 Total needs 888300 1128000 Less: Beginning inventory -42000 -42000 Unit to be produce 846300 1086000

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