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just required 1 please with explanation ! please and thanks :) Santana Rey expects second-quarter 2020 sales of Business Solutions's line of computer furniture to
just required 1 please with explanation ! please and thanks :)
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 ary changes in strategy. Monthly sales averaged 46 desk units (sales price of $1,350 ) and 30 chairs (sales price of $600 ) - Reflects revenue and expense activity only related to the computer furniture segment. t Revenue: (138 desks $1,350)+(90 chairs $600)=$186,300+$54,000=$240,300 Cost of goods sold: (138 desks $850)+(90 chairs $350)+$33,000=$181,800 Santana Rey believes that sales will increase each month for the next three months (April, 54 desks, 42 chairs; May, 58 desks, 45 chairs; June, 62 desks, 48 chairs) if selling prices are reduced to $1,260 for desks and $550 for chairs and advertising expenses are increased by 10% and remain at that level for all three months. The products' varlable cost will remain at $850 for desks and $350 for chairs. The soles statf will continue to earn a 10% commission, the fixed manufacturing costs pec month wilifemain at $12,000 and other fixed expenses will remain at $7,000 per month. Required: 1. Prepare budgeted income statements for the computer furniture segment for each of the months of April, Moy, and June that show the expected resuits from implomenting the proposed changes. Use o threo-column format, with one column for each month. 2. Recormmend whether Santona should implement the proposed changes. Hint Compare quarterly income for the proposed AprilMay-June period to the quarterly income for the January-Feoruary.March period. Required: 1. Prepare budgeted income statements for the computer furniture segment for each of the months of April, May, and June that shov the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. 2. Recommend whether Santana should implement the proposed changes. Hint Compare quarterly income for the proposed AprilMay-June period to the quarterly income for the January-February-March period. Complete this question by entering your answers in the tabs below. 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. (Negative balances and should be indicated with minus sign.) Step by Step Solution
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