Holly Company prepared the following budgeted income statement for the first quarter of 2024: (Click the icon to view the budgeted income statement.) Holly Company is considering two options. A (Click the icon to view the options.) Read the requirements. C. Requirement 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $15,000. Round all calculations to the nearest dollar. Begin by preparing the budgeted income statement for Option 1. Holly Company Budgeted Income Statement For the Quarter Ended March 31, 2024 January Sales Revenue Cost of Goods Sold Gross Profit S and A Expenses Operating Income Income Tax Expense Net Income Option 1 is to increase advertising by $900 per month. Option 2 is to use better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 65% but will provide a better product at the same sales price. The marketing manager projects either option will result in sales increases of 30% per month rather than 20%. Holly Company Budgeted Income Statement For the Quarter Ended March 31, 2024 January February March Total Net Sales Revenue (20% increase per month) $ 18,000 $ 21,600||$ 54,600 $ 15,000 9,000 Cost of Goods Sold (60% of sales) 32,760 10,800 7,200 12,960 8,640 Gross Profit 6,000 21,840 12,060 3,700 4,000 4,360 S and A Expenses ($2,200 + 10% of sales) Operating Income Income Tax Expense (20% of operating income) 2.300 3,200 4,280 9,780 460 640 856 1,956 7,824 $ 1,840 $ 2,560 $ 3,424 $ Net Income