Merline Manufacturing makes its product for $65 per unit and sells it for $149 per unit. The sales staff receives a commission of 10% of sales. Its December income statement follows. $ 1,490,000 650,000 840,000 MERLINE MANUFACTURING Income Statement For Month Ended December 31 Sales Cost of goods sold Gross profit Selling, general, and administrative expenses Sales commissions (10%) Advertising Office rent Administrative salaries Depreciation-office equipment Office Insurance Net income $ 149,000 238,000 25,900 49,500 59,500 13,900 535,800 $ 304,200 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 $134 per unit and advertising is increased to $297,500 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 $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 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 DepreciationOffice equipment Office insurance Total expenses 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