P22-55B (similar to) 3 Question Help Shaner Company prepared the following budgeted income statement for the first quarter of 2018: B Click the icon to view the budgeted income statement.) Shaner Company is considering two options. i (Click the icon to view the options.) Read the requirements Requirement 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $10,000. Round all calculations to the nearest dollar. Begin by preparing the budgeted income statement for Option 1. Shaner Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January Sales Revenue Cost of Goods Sold Gross Profit S and A Expenses Operating Income Income Tax Expense Net Income Enter any number in the edit fields and then click Check Answer. parts o remaining Clear All Check Answer Shaner Company Budgeted Income Statement For the Quarter Ended March 31, 2018 January February Net Sales Revenue (20% increase per month) $ 10,000 $ 12,000 $ Cost of Goods Sold (50% of sales) 5,000 6,000 Gross Profit 5,000 6,000 S and A Expenses ($3,000 + 5% of sales) 3,500 3,600 Operating Income 1,500 2,400 Income Tax Expense (30% of operating income) - 450 720 $ 1,050 $ 1,680 $ Net Income March 14,400 $ 7,200 7,200 3,720 Total 36,400 18,200 18,200 10,820 3,480 1,044 2,436 $ 7,380 2.214 5,166 1. Prepare budgeted income statements for both options, assuming both options begin in January and January sales remain $10,000. Round all calculations to the nearest dollar. 2. Which option should Shaner choose? Explain your reasoning. 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%