2 3 4 5 Business Solutions Segment Income Statement First Quarter, 2020 Business Solutions Proposal Calculations April May June $150,000 30,000 $180,000 Second Quarter $0 $0 $0 0 0 6 Sales Desks 8 Chairs 9 Total Sales 10 Variable Cost 11 Desk 12 Chairs 13 Manufacturing fixed costs 14 Total costs 15 Gross Profit 16 Other Expenses 17 Sales commisisons 18 Advertising expense 19 Other fixed expenses 20 Total expenses 21 Net income 90,000 15,000 10,000 115,000 $65,000 0 0 $0 0 0 18,000 9,000 18,000 $45,000 $20,000 0 $0 $0 22 23 24 25 26 27 28 JA 6 SP 22 Santana Rey expects second-quarter 2020 sales of Business Solutions's line of computer furniture to be the same as the first quarter's sales reported below) without any changes in strategy. Monthly sales averaged 40 desk units (sales price of $1,250) and 20 chairs (sales price of $500). BUSINESS SOLUTIONS-Computer Furniture Segment Segment Income Statement For Quarter Ended March 31, 2020 $150,000 135.000 45.000 Sales Cost of good old Gros prodit Expenses Sales commissions (ON) Mertising Other fed Totapeter Net Income 18,000 9.000 " Ndiyeleri Rochie Coch.000 Santana Rey believes that sales will increase each month for the next three months (April, 4 desks, 32 chains: May, 5 desks. 35 chairs, June, 56 desks, 3 chains) / selling prices are reduced to $1.150 for desks and 5450 for chairs and advertising expenses are Page 6 Increased by 10% and remain at that level for all three months. The products' variable cost will remain at $50 for desks and $250 for chairs. The sales staff will continue to earn a 10% commission, the fived manufacturing costs per month will remain at $10,000 and other fixed expenses will remain a $6,000 per month . 1 IA 6 SINT Cost of poods sold Gross prode 135,000 45.000 18,000 9.000 Sales commission 1) Advertising pees Other fed expenses Total expenses Net Income 15 000 45.000 Referenspectivity and to the computer for et model is 1.000.000.000 Cut.... Santana Rey believes that sales will increase each month for the next three months (April, 48 deska, 32 chairs: May, sa des chairs June, 56 desks, 3 chairs) / selling prices are reduced to 1.150 for desks and $450 for chairs and advertising expenses are Page 6 increased by 1oN and remain at that level for all three months. The products variable cost will remain at 875 for desks and $250 for chairs. The sales staff will continue to earn a commission, the fived manufacturing costs per month will remain at $10,000 and other fixed expenses will remain at $6,000 per month Required 1. Prepare budgeted income statements for the computer furniture segment for each of the months of April. May and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. Check Budgeted income out on May 1945 2. Use the budgeted income statements from part to recommend whether Santana Rey should implement the proposed changes