More Info Kling Company prepared the following budgeted income statement for the first quarter of 2018: Click the icon to view the budgeted income statement.) Requirement 1. Prepare budgeted income statements for both options, assuming both options begin in January and J Begin by preparing the budgeted income statement for Option 1. Option 1 is to increase advertising by $1,200 per month. Option 2 is to use better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 55% but will provide a better product at the same sales price. The marketing manager projects either option will result in sales increases of 30% per month rather than 20%. Data Table Print Done Kling Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total Sales Revenue Kling Company Budgeted Income Statement For the Quarter Ended March 31, 2018 Cost of Goods Sold Gross Profit January February March Total $ 10,000 $ 12.000 $ 14.400 $ 36,400 S and A Expenses Operating Income Income Tax Expense 5,000 6,000 7,200 18,200 5,000 7,200 18,200 Net Sales Revenue (20% increase per month) Cost of Goods Sold (50% of sales) Gross Profit S and A Expenses ($3,000 + 5% of sales) Operating Income Income Tax Expense (30% of operating income) 3,500 6,000 3,600 2,400 Net Income 3,720 10,820 1,500 3,480 7,380 Now prepare the budgeted income statement for Option 2. (Round all amounts to the nea 450 720 1,044 2,436 2.214 5,166 $ 1,050 1,680 $ Net Income Kling Company Budgeted Income Statement For the Quarter Ended March 31, 2018 Print Done Enter any number in the edit fields and then continue to the next question. More Info Kling Company prepared the following budgeted income statement for the first quarter of 2018: E: (Click the icon to view the budgeted income statement.) Net Income Option 1 is to increase advertising by $1,200 per month. Option 2 is to use better-quality materials in the manufacturing process. The better materials will increase the cost of goods sold to 55% but will provide a better product at the same sales price. The marketing manager projects either option will result in sales increases of 30% per month rather than 20%. Now prepare the budgeted income statement for Option 2. (Round all amounts to the nea Data Table Print Done Kling Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February March Total Sales Revenue Kling Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February Cost of Goods Sold March Total Gross Profit $ 10,000 $ 12,000 $ $ 14.400 $ 36,400 5,000 6,000 7,200 18,200 S and A Expenses Operating Income Income Tax Expense 5,000 6,000 7,200 18,200 Net Sales Revenue (20% increase per month) Cost of Goods Sold (50% of sales) Gross Profit S and A Expenses ($3,000 + 5% of sales) Operating Income Income Tax Expense (30% of operating income) 3,500 3,600 3.720 10,820 Net Income 1,500 2,400 3,480 7,380 Requirement 2. Which option should Kling choose? Explain your reasoning. 450 1,050 720 1,680 1,044 2,436 2,214 5,166 $ $ $ $ because net income for the que Net Income for the quarter than the $5,166 currently budgeted, Kling If one of the two options is chosen, it would be may decide Print Done Enter any number in the edit fields and then continue to the next