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Mertine Manufacturing makes its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the

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Mertine Manufacturing makes its product for $75 per unit and sells it for $150 per unit. The sales staff receives a 10% commission on the sale of each unit its December income statement follows MELINE MANUFACTURING Tecoee Statement For Month Ended December 31, 2019 Sales $2,250,000 Cost of goods sold 1,125,000 Gross profit 1,125,000 Operating expenses Sales comissions (Lox) Advertising 250,000 Store rent 30,000 Administrative salaries 45,000 Depreciation Office equipment 50,000 Other expenses 10,000 Total expenses 610,000 Het Income $ 515,000 Monagement 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. I believes that unit salos 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 $125 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 $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 month of January February, and March that show the expected results from 2. Is net income for March expected to increase with the proposed strategy changes? Complete this question by entering your answers in the tabs below. Nequired t Recured 2 Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare budgeted income statements for each of the months of January, February, and March that show the expected results from implementing the proposed changes. (Enter your final answers in whole dollars.) MERLINE MANUFACTURING Budgeted Sales For Months of January, February, and March, 2020 January February March Budgeted sales (in dollars) MERLINE MANUFACTURING Budgeted Income Statement For Months of January, February, and March, 2020 January February March Expenses Sales commissions Advertising Store rent Administrative salaries Depreciation-Office equipment Other expenses Total expenses Required 2 > 30,000 overtas store rent Administrative salaries Depreciation office equipment Other expenses Total expenses 50.000 610.000 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 (beginning with January, it the item's selling price is reduced to 5125 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 $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 the expected results from implementing the proposed changes 2 is net income for March expected to increase with the proposed strategy changes? Complete this question by entering your answers in the tabs below. Required 1 Required 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?

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