Sheridan Industries had sales in 2021 of $6,256,000 and gross profit of $1,012,000. 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 115,000 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 119,600 units. At the end of 2021, Sheridan has 38,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 34, units. If Plan B is accepted, the ending inventory should be equal to 60,000 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 $1,744,000. (a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
Sheridan Industries had sales in 2021 of $6,256,000 and gross profit of $1,012,000. 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 115,000 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 119,600 units. At the end of 2021, Sheridan has 38,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 34, units. If Plan B is accepted, the ending inventory should be equal to 60,000 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 $1,744,000. (a) Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
please answer with complete and correct working thanks
Transcribed Image Text:Sheridan Industries had sales in 2021 of $6,256,000 and gross profit of $1,012,000. 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 115,000 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 119,600 units.
At the end of 2021, Sheridan has 38,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be 34,00
units. If Plan B is accepted, the ending inventory should be equal to 60,000 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 $1,744,000.
(a)
Prepare a sales budget for 2022 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
SHERIDAN INDUSTRIES
Sales Budget
Plan A
S
Plan B
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 4 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education