Merline Manufacturing makes its product for $65 per unit and sells it for $143 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, 2019 $1,430,000 Sales Cost of goods sold Gross profit Operating expenses Sales commissions (10% ) Advertising 650,000 780,000 143,000 226,000 25, 300 46,500 56,500 13,300 Store rent Administrative salaries Depreciation-Office equipment Other expenses Total expenses 510,600 269,400 Net income Management expects December's results to be repeated in January, February, and March of 2020 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 (beglnning with January) if the item's selling price is reduced to $128 per unit and advertising expenses are increased by 20 % and remain at that level for all three months. The cost of its product will remain at $65 per unit, the sales staff will continue to earn a 10% commission, and the remalning expenses will stay the same. Required: 1. Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes. 2. Is net income for March expected to increase with the proposed strategy changes? Is net income for March expected to increase with the proposed strategy changes? Is net income for March expected to increase with the proposed strategy changes? Required 1 Required 2