Donna Tse has recently accepted the position of assistant manager at Cycle World, a bicycle store in St. Louis.She has just finished her accounting courses.Cycle World's manager and owner, Jeff Towry, asks Tse to prepare budgeted income statement based on the information he collected.Tse's budget follows:Sales Revenue$244,000 Cost of Goods Sold177,000 Gross Profit$67,000 Selling and Admin Expenses: Salaries and Commissions Expense$46,000

Rent Expense8,000 Depreciation Expense2,000Insurance Expense800Miscellaneous Expense12,000 Total Expenses$68,800 Operating Loss($1,800) Interest Expense($225)

Net Loss($2,025)

Tse does not want to give Towry this budget without making constructive suggestions for steps Towry could take to improve expected performance.Assume the role of Donna Tse.Write memo to Towry outlining your suggestions.