Merline Manufacturing makes its product for $55 per unit and sells it for $141 per unit. The sales staff receives a commission of 10% of sales. Its December income statement follows. MERLINE MANUFACTURING Income Statement For Month Ended December 31 Sales $ 1,410,000 Cost of goods sold 550,000 860,000 Gross profit Selling, general, and administrative expenses Sales commissions (10%) Advertising Office rent Administrative salaries Depreciation-Office equipment Office Insurance Net income $ 141,000 222,000 25,100 45,500 55,500 13,100 502,200 $357,800 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 $126 per unit and advertising is increased to $244,200 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 $55 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 results from implementing the proposed plan. 2. For the proposed plan, is income in March budgeted to be higher than income in December? Complete this question by entering your answers in the tabs below. Required 1 Required 2 < Prev 7 of 7 Next> Check 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.) Budgeted sales (in units) Budgeted selling price per unit Budgeted sales (in dollars) Selling, general, and administrative expenses Sales commissions. Advertising Office rent Administrative salaries, Depreciation-Office equipment Office insurance Total expenses MERLINE MANUFACTURING Budgeted Sales January February March MERLINE MANUFACTURING Budgeted Income Statement January February March $ 0 $ 0 0 0 $ 0 < Prev 7 of 7 Next ook Advertising Office rent Administrative salaries Depreciation-Office equipment Office Insurance Net income 222,000 25,100 45,500 55,500 13,100 502,200 $357,800 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 $126 per unit and advertising increased to $244,200 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 $55 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay same. int ences Rec 1. Prepare budgeted income statements for each of the months of January, February, and March that show results from implemen the proposed plan. 2. For the proposed plan, is income in March budgeted to be higher than income in December? Complete this question by entering your answers in the tabs below. Required 1 Required 2 For 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?