Answer:
Production budget = 76, 000 units
Explanation:
<em>The sales budget is adjusted for the projected opening and closing inventories unit to arrive at the production budget: </em>
The production budget can be determined using the formula below
Production budget = Sales budget + closing inventory- opening inventory
Production budget = 67,000 + 15,000 - 6,000
= 76000
Production budget = 76, 000 units
Answer: The answer is $27.25
Explanation:
Let x be the price Sweet dreams will charge to earn the profit of $75,000
New sales units = 20,000
New variable cost = $19
We know, Sales - Variable cost - Fixed cost = Profit
Now applying the equation,
20,000x - (20,000*19) - 90,000 = $75000
20,000x = $75,000 + 380,000 + 90,000
therefore, x = $27.25
So, Sweet Dreams will charge $27.25 to earn the same profit it is earning now i.e. $75000 per year.
