Answered step by step
Verified Expert Solution
Question
1 Approved Answer
i need required 1 and required 2 please Merline Manufacturing makes its product for $65 per unit and sells it for $143 per unit. The
i need required 1 and required 2 please
Merline Manufacturing makes its product for $65 per unit and sells it for $143 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31, 2019 Sales $1,430,000 Cost of goods sold 650,000 Gross profit 780,000 Operating expenses Sales comissions (108) 143,000 Advertising 226,000 Storrent 25,300 Administrative salarien 46,500 Depreciation-office equipment 56,500 Other expenses 13,300 Total expenses 510,600 Net income 269.400 Management expects December's results to be repeated in January, February, and March of 2020 without any changes in strategy Management, however, has an alternative plan. It believes that unit sales will increase at a rate of 10% each month for the next three months (beginning with January) If the item's selling price is reduced to $128 per unit and advertising expenses are increased by 20% and remain at that level for all three months. The cost of its product will remain at $65 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same. Required: 1. Prepare budgeted Income statements for each of the months of January February, and March that show the expected results from implementing the proposed changes. 2. Is net income for March expected to increase with the proposed strategy changes? 18 lary, February, and March that show the ex implementing the proposed changes. 2. Is net income for March expected to increase with the proposed strategy changes? Complete this question by entering your answers in the tabs below. Required 1 Refuired 2 Is net income for March expected to increase with the proposed strategy changes? es is net income for March expected to increase with the proposed strategy changes? 60 O Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started