Prepare a production budget for 2022 under each plan.**HILL INDUSTRIES** **Production Budget**| Plan A | Plan B ||--------|--------|| [Dropdown/Field] | [Field] || [Dropdown/Field] | [Field] || [Dropdown/Field] | [Field] || [Dropdown/Field] | [Field] |Buttons:- eTextbook and Media- Save for LaterAttempts: 0 of 3 used---**Compute the production cost per unit under each plan.** (Round answers to 2 decimal places, e.g. 1.25.)| Plan A | Plan B ||--------|--------|| Production cost per unit $ | $ |[Field] | [Field] **Hill Industries Sales Budget Analysis**In 2021, Hill Industries reported sales of $6,800,000 and a gross profit of $1,100,000. To boost its gross profit for 2022, management is evaluating two budget scenarios:**Plan A:**- Increase the unit selling price from $8.00 to $8.40.- Anticipated sales volume decrease of 125,000 units from 2021 levels.**Plan B:**- Decrease the unit selling price by $0.50.- Expected increase in sales volume by 130,000 units.**Inventory Considerations:**- Ending 2021 inventory: 40,000 units.- Under Plan A, the ending inventory for 2022 would be 35,000 units.- Under Plan B, the ending inventory for 2022 would be 60,000 units.**Cost Breakdown per Unit:**- Direct labor: $1.50- Direct materials: $1.30- Variable overhead: $1.20**Fixed Overhead for 2022:** $1,895,000**Task: Prepare a sales budget for 2022 for each plan.** *Note: Round unit selling price to two decimal places, e.g., 52.70.***Diagram Explanation:**The diagram presents a template for preparing the sales budget under each plan:- Two columns are labeled as Plan A and Plan B.- Fields are available for input, including: - Unit price - Sales volume - Total revenue- Ensure calculations are rounded to two decimal places for precision in financial planning.This exercise aims to assess the financial impact of each strategy on Hill Industries' gross profit and overall financial health.

Budgeting is a process to plan how to, where and how much company should spend money for a future…

Answered: Prepare a sales budget for 2022 under…

Business

Accounting

Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Master Budget

A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.

Sales Budget and Selling

A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.

Question

Prepare a production budget for 2022 under each plan.

**HILL INDUSTRIES**
**Production Budget**

| Plan A | Plan B |
|--------|--------|
| [Dropdown/Field] | [Field] |
| [Dropdown/Field] | [Field] |
| [Dropdown/Field] | [Field] |
| [Dropdown/Field] | [Field] |

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**Compute the production cost per unit under each plan.** (Round answers to 2 decimal places, e.g. 1.25.)

| Plan A | Plan B |
|--------|--------|
| Production cost per unit $ | $ |

[Field] | [Field]

**Hill Industries Sales Budget Analysis**

In 2021, Hill Industries reported sales of $6,800,000 and a gross profit of $1,100,000. To boost its gross profit for 2022, management is evaluating two budget scenarios:

**Plan A:**
- Increase the unit selling price from $8.00 to $8.40.
- Anticipated sales volume decrease of 125,000 units from 2021 levels.

**Plan B:**
- Decrease the unit selling price by $0.50.
- Expected increase in sales volume by 130,000 units.

**Inventory Considerations:**
- Ending 2021 inventory: 40,000 units.
- Under Plan A, the ending inventory for 2022 would be 35,000 units.
- Under Plan B, the ending inventory for 2022 would be 60,000 units.

**Cost Breakdown per Unit:**
- Direct labor: $1.50
- Direct materials: $1.30
- Variable overhead: $1.20

**Fixed Overhead for 2022:** $1,895,000

**Task: Prepare a sales budget for 2022 for each plan.** *Note: Round unit selling price to two decimal places, e.g., 52.70.*

**Diagram Explanation:**

The diagram presents a template for preparing the sales budget under each plan:

- Two columns are labeled as Plan A and Plan B.
- Fields are available for input, including:
- Unit price
- Sales volume
- Total revenue
- Ensure calculations are rounded to two decimal places for precision in financial planning.

This exercise aims to assess the financial impact of each strategy on Hill Industries' gross profit and overall financial health.

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