Problem 22-03A a-b, c1, d (Video) (Part Level Submission)
Blossom Industries had sales in 2019 of $7,280,000 and gross
profit of $1,149,000. 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 112,000
units.
At the end of 2019, Blossom has 44,000 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 68,000 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 $1,974,599.
Your answer is correct. | |
Prepare a sales budget for 2020 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
BLOSSOM INDUSTRIES Sales Budget December 31, 2020For the Quarter Ending December 31, 2020For the Year Ending December 31, 2020 |
||||
Plan A |
Plan B |
|||
Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price |
||||
Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price |
$ | $ | ||
Direct LaborDirect MaterialsExpected Unit SalesProduction UnitsTotal SalesUnit Selling Price |
$ | $ |
Prepare a production budget for 2020 under each plan.
BLOSSOM
INDUSTRIES Production Budget For the Year Ending December 31, 2020For the Quarter Ending December 31, 2020December 31, 2020 |
||||
Plan A |
Plan B |
|||
Beginning Direct MaterialsTotal Materials RequiredExpected Unit SalesTotal Pounds Needed for ProductionDirect Materials PurchasesTotal Required UnitsBeginning Finished Goods UnitsRequired Production UnitsDesired Ending Direct MaterialsDesired Ending Finished Goods UnitsDirect Materials per Unit |
||||
AddLess :Direct Materials PurchasesDesired Ending Finished Goods UnitsExpected Unit SalesRequired Production UnitsTotal Materials RequiredDesired Ending Direct MaterialsTotal Pounds Needed for ProductionTotal Required UnitsDirect Materials per UnitBeginning Direct MaterialsBeginning Finished Goods Units |
||||
Total Required UnitsBeginning Direct MaterialsBeginning Finished Goods UnitsDesired Ending Direct MaterialsTotal Pounds Needed for ProductionDesired Ending Finished Goods UnitsDirect Materials per UnitDirect Materials PurchasesExpected Unit SalesRequired Production UnitsTotal Materials Required |
||||
AddLess :Desired Ending Direct MaterialsDirect Materials PurchasesRequired Production UnitsTotal Pounds Needed for ProductionTotal Materials RequiredDirect Materials per UnitBeginning Direct MaterialsExpected Unit SalesTotal Required UnitsBeginning Finished Goods UnitsDesired Ending Finished Goods Units |
||||
Expected Unit SalesDirect Materials PurchasesDirect Materials per UnitTotal Pounds Needed for ProductionDesired Ending Finished Goods UnitsTotal Required UnitsRequired Production UnitsBeginning Finished Goods UnitsBeginning Direct MaterialsDesired Ending Direct MaterialsTotal Materials Required |
Prepare a sales budget for 2020 under each plan. (Round Unit selling price answers to 2 decimal places, e.g. 52.70.)
BLOSSOM INDUSTRIES Sales Budget For the Year Ending December 31, 2020 |
||||
Plan A |
Plan B |
|||
Unit Sales |
910000*90% = 819000 |
910000+112000 = 1022000 |
||
Unit Selling Price |
$8.40 | $7.50 | ||
Total Sales |
$6879600 | $7665000 |
Prepare a production budget for 2020 under each plan.
BLOSSOM INDUSTRIES Production Budget For the Year Ending December 31, 2020 |
||||
Plan A |
Plan B |
|||
Expected Unit Sales |
819000 |
1022000 |
||
Add: Desired Ending Finished Goods |
32760 |
68000 |
||
Total Required Units |
851760 |
1090000 |
||
Less: Beginning Finished Goods Units |
-44000 |
-44000 |
||
Required Production Units |
807760 |
1046000 |
Problem 22-03A a-b, c1, d (Video) (Part Level Submission) Blossom Industries had sales in 2019 of...
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