Please do not give solution in image format thanku Compute the gross profit under each plan. (Round answers to O decimal places, eg. 125)Gross Profit $Which plan should be accepted?(c1)Plan Ashould be accepted.Production cost per unitPlan BCompute the production cost por unit under each plan. (Round answers to 2 decimal places, eg 1.25)Plan A$1Plan B Waterway Industries had sales in 2021 of $8,504,000 and gross profit of $1,375,000. Management is considering two alternativebudget plans to increase its gross profit in 2022.Plan A would increase the unit selling price from $8 to $8.4. Sales volume would decrease by 156,000 units from its 2021 level. Plan Bwould decrease the unit selling price by $1. The marketing department expects that the sales volume would increase by 163,000 units.At the end of 2021, Waterway has 50,000 units of inventory on hand. If Plan A is accepted, the 2022 ending inventory should be44,000 units. If Plan B is accepted, the ending inventory should be equal to 75,000 units. Each unit produced will cost $1.50 in directlabor, $1.30 in direct materials, and $1.20 in variable overhead. The fixed overhead for 2022 should be $2,252,500.

The profit that a business makes after deducting the costs of producing and selling its goods or the…

Answered: Waterway Industries had sales in 2021…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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