Hirsch Industries has sales in 2007 of $5,230,000 (752,900 units) and gross profit of $1,582,400?

Management is considering two alternative budget plans to increase its gross profit in 2008.

Plan A would increase the selling price per unit from $6.95 to $7.63. Sales volume would decrease by 10% from its 2007 level. Plan B would decrease the selling price per unit by 5%. The marketing department expects that the sales volume would increase by 101,400 units.

At the end of 2007, Hirsch has 74,910 units on hand. If Plan A is accepted, the 2008 ending inventory should be equal to 90,720 units. If Plan B is accepted, the ending inventory should be equal to 101,000 units. Each unit produced will cost $2.02 in direct materials, $1.50 in direct labor, and $0.54 in variable overhead. The fixed overhead for 2008 should be $967,100.

Can you help me fill in the blanks?!?

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Sales Budget:
Expected unit sales @ $7.63 = 677,610 (752,900 x 90%)
Expected unit sales @ $6.60 = 854,300 (752,900 + 101,400)
Multiply unit sales by price for total sales

Production Budget:
Expected unit sales same as above
Total required = expected sales + ending finished goods
Beginning Finished Unites = 74,910 for both
Required production = total required - beginning

Unit Costs:
2.02 + 1.50 + .54 + (967,100 / required production for each plan)

Gross profit - you would really need to know cost of beginning inventory - assuming that those are sold first, and remainder of sales comes from current year production. That might mean dividing 2007 cost (sales - gross profit) by 752,900 to get average 2007 cost per unit, and multiplying that cost by beginning inventory balance of 90,720. Then in the gross profit calculation it would be that total cost, plus the new costs times the number of new units sold in the new year.

But all that may be more complex than they want it to be - so they may just want you to calc GP = (total unit sales x price) - (total unit sales x unit cost)