Emporia State University Operations And Supply Chain Management Assignment Help - Sales Budget

Question - Colt Industries had sales in 2008 of $6,400,000 and gross profit of $1,100,000. Management is
considering two alternative budget plans to increase its gross profit in 2009.

Plan A would increase the selling price per unit from $8.00 to $8.40. Sales volume would decrease by
5% from its 2008 level. Plan B would decrease the selling price per unit by $0.50. The marketing
department expects that the sales volume would increase by 150,000 units.

At the end of 2008, Colt has 40,000 units of inventory on hand. If Plan A is accepted, the 2009 ending
inventory should be equal to 5% of the 2009 sales. If Plan B is accepted, the ending inventory should
be equal to 50,000 units. Each unit produced will cost $1.80 in direct labor, $1.25 in di ...Read More rect materials,
and $1.20 in variable overhead. The fixed overhead for 2009 should be $1,895,000.

How do I prepare a sales budget for 2009 under each plan? ...Read Less

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