Net income $ 1,266 Reflects revenue and expense activity only related to the computer furniture segment. + Revenue: (126 desks * $1,270) + (66 chairs * $520) = $160,020 + $34,320 = $194,340 Cost of goods sold: (126 desks * $770) + (66 chairs * $270) + $30,600 = $145,440 Santana Rey believes that sales will crease each month for the next three months (April, 50 desks: 34 chairs; May, 54 desks, 37 chairs: June 58 desks, 40 chairs) If selling prices are reduced to $1170 for desks and $470 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products' variable cost will remain at $770 for desks and $270 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,200 and other fixed expenses will remain at $6,200 per month, Required: 1. Prepare budgeted Income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. June BUSINESS SOLUTIONS COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April May, and June April May Sales 74.480 Cost of goods sold Gross profit 74.480 Expenses Sales commissions Advertising Other fixed expenses Net income $ 1,266 Reflects revenue and expense activity only related to the computer furniture segment. + Revenue: (126 desks * $1,270) + (66 chairs * $520) = $160,020 + $34,320 = $194,340 Cost of goods sold: (126 desks * $770) + (66 chairs * $270) + $30,600 = $145,440 Santana Rey believes that sales will crease each month for the next three months (April, 50 desks: 34 chairs; May, 54 desks, 37 chairs: June 58 desks, 40 chairs) If selling prices are reduced to $1170 for desks and $470 for chairs, and advertising expenses are increased by 10% and remain at that level for all three months. The products' variable cost will remain at $770 for desks and $270 for chairs. The sales staff will continue to earn a 10% commission, the fixed manufacturing costs per month will remain at $10,200 and other fixed expenses will remain at $6,200 per month, Required: 1. Prepare budgeted Income statements for the computer furniture segment for each of the months of April, May, and June that show the expected results from implementing the proposed changes. Use a three-column format, with one column for each month. June BUSINESS SOLUTIONS COMPUTER FURNITURE SEGMENT Budgeted Income Statements For Months of April May, and June April May Sales 74.480 Cost of goods sold Gross profit 74.480 Expenses Sales commissions Advertising Other fixed expenses