Merline Manufacturing makes its product for $75 per unit and sells it for $139 per unit. The sales staff receives a commission of 10% of sales, its December income statement follows. 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 $124 per unit and advertising is increased to $239,800 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 $75 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? 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 $124 per unit and advertising is increased to $239,800 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 $75 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. 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 dollarsi.) \begin{tabular}{|l|l|l|l|} \hline \multicolumn{2}{|c|}{ MERLINE MANUFACTURING } & \\ \hline & & February & March \\ \hline & & & \\ \hline & & & \\ \hline Selling, general, and administrative expenses & & & \\ \hline Sales commissions & & & \\ \hline Advertising & & & \\ \hline Office rent & & & \\ \hline Administrative salaries & & & \\ \hline Depreciation-Office equipment & & & \\ \hline Office insurance & $ & & \\ \hline Total expenses & & & \\ \hline & & & \\ \hline \end{tabular} Fecuited 1 Required 2 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. For the proposed plan, is income in March budgeted to be higher than income in December
