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Ogleby Industries has sales in 2016 of $5,600,000 (800,000 units) and gross pro t of $1,344,000. Management is considering two alternative budget plans to increase its gross profit in 2017.
Problem a) Prepare sales budget for 2017 under (1) Plan A and ( 2 ) Plan B.
Problem b) Prepare production budget for 2017 under (1) Plan A and ( 2 ) Plan B.
Problem c) Compute the cost per unit under (1) Plan A and ( 2 ) Plan B. Explain why the cost per unit is different from each of the two plans.
Problem d) Which plan should be accepted ? ( Compute gross profit under each plan )
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