12 May HOW DO I PREPARE A SALES BUDGET FOR 2009 UNDER EACH PLAN?
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 150000 units. At the end of 2008 Colt has 40000 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 50000 units. Each unit produced will cost $1.80 in direct labor $1.25 in direct materials and $1.20 in
variable overhead. The fixed overhead for 2009 should be $1895000. How do I prepare a sales budget for 2009 under each plan?
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