Litwin industries has sales in 2011 of 4900000 700000 units

Reference no: EM13609617

Litwin Industries has sales in 2011 of $4,900,000 (700,000 units) and gross profit of $1,187,500. Management is considering two alternative budget plans to increase its gross profit in 2012.

Plan A would increase the selling price per unit from $7.00 to $7.60. Sales volume would decrease by 10% from its 2008 level. Plan B would decrease the selling price per unit by 5%. The marketing department expects that the sales volume would increase by 100,000 units.

At the end of 2011, Litwin has 70,000 units on hand. If Plan A is accepted, the 2012 ending inventory should be equal to 90,000 units. If Plan B is accepted, the ending inventory should be equal to 100,000 units. Each unit produced will cost $2.00 in direct materials, $1.50 in direct labor, and $0.50 in variable overhead. The fixed overhead for 2009 should be $975,000.

Work i've done so far:
Actual- 2011 Plan A Plan B
Expected Unit Sales 700,000 630,000 800,000
Add Desired ended finished good units 70,000 90,000 100,000
Total Required Units 770,000 720,000 900,000
Less: Beginning finished goods units ????? 70,000 70,000
Required Production Units 650,000 830,000

How do you find the Less: Beginning finished goods units for "Actual- 2011"? Would it be 70,000 also?

Reference no: EM13609617

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