Merline Manufacturing makes its product for $50 per unit and sells it for $150 per unit. The sales staff receives a commission of'|0% of sales. Its December income statement follows. MERLINE MANUFAETURING Income Statement For Month Ended December 31 Sales 3 1,500,000 Cost of goods sold 500,000 Gross profit 1,000,000 Selling, general, and administrative expenses Sales commissions [10%) 5 150,000 Advertising 240,000 Office rent 26,000 Administrative salaries 50,000 DepreciationOffice equipment 60,000 Office Insurance 14,000 540,000 Net income $ 460,000 Management expects December's results to be repeated in January, February, and March without any changes in strategy. Management, however. has an alternative plan. It believes that if the unit selling price is reduced to $135 per unit and advertising is increased to $300,000 per month. sales units will be 11,000 for January, 12,100 for February. and 13,310 for March. The cost of its product will remain at $50 per unit, the sales staffwill continue to earn a 10% commission, and the remaining expenses will stay the same. Required: 1. Prepare budgeted income statements for each ofthe months of January, February, and March that show results from implementing the proposed plan. 2. For the proposed plan, is income in March budgeted to be higher than income in December? Required 1 Required 2 Prepare budgeted income statements for each of the months of January, February, and March that show results from implementing the proposed plan. (Enter your final answers in whole dollars.) MERLINE MANUFACTURING Budgeted Sales January February March Budgeted sales (in dollars) MERLINE MANUFACTURING Budgeted Income Statement January February March Selling, general, and administrative expenses Sales commissions Advertising Office rent Administrative salaries Depreciation-Office equipment Office insurance Total expenses 0 O 0 0 $ 0 $ 0For the proposed plan, is income in March budgeted to be higher than income in December? For the proposed plan, is income in March budgeted to be higher than income in December