Merline Manufacturing makes its product for $60 per unit and sells it for $142 per unit. The sales staff receives a 10% commission on the sale of each unit. Its December income statement follows.

Merline Manufacturing makes its product for $60 per unit and sells it for $142 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, 2015 Sales Cost of goods sold S 1,420,000 600,000 Gross profit Operating expenses 820,000 142,000 224,000 25,200 46,000 56,000 13,200 Sales commissions (10%) Store rent Administrative salaries Other expenses Total expenses e equipment 506,400 Net income S 313,600 Management expects December's results to be repeated in January, February, and March of 2016 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 $127 per unit and advertising expenses are increased by 15% and remain at that level for all three months. The cost of its product will remain at $60 per unit, the sales staff will continue to earn a 10% commission, and the remaining expenses will stay the same. ceserates in stregy: Management ow, Februany and Required: Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes